Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

Farm Amalgamations (Land)

Sir Richard Glyn: asked the Minister of Agriculture, Fisheries and Food (1) how he proposes to assess the rents to be charged for agricultural land after it has been bought by the Government on a voluntary basis under the proposed new scheme; and how the tenants will be selected if there are numerous applicants for one particular farm;
(2) on what principle he will allot agricultural land bought by the Government on a voluntary basis under the proposed new scheme for amalgamation with other land to form holdings of a commercial size.

Mr. J. E. B. Hill: asked the Minister of Agriculture, Fisheries and Food whether he plans to farm himself, as Minister, any of the land which the Government may purchase in course of the proposed farm amalgamation programme.

The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): The present intention is to let rather than farm such land until it can be used for an amalgamation to improve farm structure. The method of selecting tenants, and the rent to be charged are matters of everyday land management which will be decided in the light of the circumstances of each case.

Sir Richard Glyn: Is the Minister aware that there will be many competitors for each of the farms, when they are available, and that these will include many of the neighbouring farmers? What

steps is he taking to ensure that a procedure is adopted which is fair to all concerned, so that there can be no repetition of the error of judgment in his Department which culminated in Crichel Down?

Mr. Peart: I was not responsible for administration then, but I would agree that any administration must be fair and must also appear to be fair. I will try to achieve that. I think that it is very important. We have a very effective land service, and I am quite certain that, as they have been in my other estates, they will be efficient and fair in these cases.

Mr. Hill: This kind of letting—would it be of a terminable kind, not a fully protected agricultural letting? Would it be done on something like a year's notice so that the Minister would be able to have the land available for amalgamation when he wants it?

Mr. Peart: I hope that the hon. Member will not tie me down to give a definite answer on that. As he knows, I am preparing legislation, and I am having discussions, on this very important matter. I will take careful note of what the hon. Member has said, as I believe he has said it in a constructive spirit.

Departmental Staff

Mr. Onslow: asked the Minister of Agriculture, Fisheries and Food what increase or decrease in staff there was in the Department under his control in the period 16th October, 1964, to 15th October, 1965; and what increase or decrease he anticipates in the period up to 15th April, 1966.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie): Mid-month figures are not available, but the staff of the Department is estimated to have fallen by 66 between 16th October, 1964, and 15th October, 1965. It is estimated that it will then increase by about 130 by the 15th April, 1966.

Mr. Onslow: Can the Minister explain why he was unable to achieve the decrease of 110 which he forecast six months ago?

Mr. Mackie: The decrease is 66 and the total figure of my Department is 15,542. It is not a very big error.

Food Labelling Regulations

Mrs. Joyce Butler: asked the Minister of Agriculture, Fisheries and Food when he will introduce new food labelling regulations.

Mr. John Mackie: Comprehensive proposals for new regulations on food labelling were issued to interested parties on 27th September. Comments were asked for by 3rd January next. It will be necessary to consider the comments received and I cannot therefore yet say exactly when the regulations themselves will be made, but it will be as soon as possible.

Mrs. Butler: While thanking my hon. Friend for this welcome news, may I ask whether he appreciates that consumer demand, and education, have increased considerably, even since the Standards Committee reported? Does he further appreciate that there will be great disappointment if the regulations do not provide for disclosure of all the contents and exact constituents of food, on the labels, particularly colourings which are especially suspect—

Mr. Speaker: Order. That is too long. That is enough of the question. Answer please.

Mr. Mackie: I take note of what the hon. Lady says. On the question of colour, we know of this point and it will be added to the comments from the interested parties.

Pesticides

Mrs. Butler: asked the Minister of Agriculture, Fisheries and Food if he will introduce regulations to require the composition of farm and garden insecticides to be clearly stated on the label or container.

Mr. John Mackie: The Advisory Committee on Pesticides and Other Toxic Chemicals is reviewing the existing voluntary arrangements for the safe use of toxic substances in agriculture, home gardening and food storage. When its report and recommendations are received, we shall consider future policy over the whole field of pesticide use, including labelling.

Mrs. Butler: In view of the fact that the nature protection organisations have

discovered that the residue of pesticides in birds has trebled in the last year and the concern of public analysts and local authorities who are reviewing residues in food, could the Minister treat this as a matter of urgency and make the present voluntary ban mandatory and introduce labelling which will protect the farmers and gardeners who use the chemicals to remind them of the dangers?

Mr. Mackie: I do not think that we can do anything until the Committee reports, much as we should like to do so. This is a very complicated subject and it is a big job for the Committee. I should not like to indicate how long it may take to report, but it should be before the end of the coming year.

Trawler Fleet (Grants)

Mr. Wall: asked the Minister of Agriculture, Fisheries and Food if he will make a statement about the present position on building subsidies for distant-water trawlers.

Mr. James Johnson: asked the Minister of Agriculture, Fisheries and Food if he will state the manner in which he will allocate the £800,000 now provided as grant to the distant-water section of the trawling fleet.

Mr. Peart: A sum of £1·6 million has been allocated for grants for fishing vessels to the end of the financial year 1966–67. Of this sum, approximately £860,000 will be available for the trawler fleet as a whole. The distribution of this total will, of course, depend on the approval of individual applications.

Mr. Wall: Would the Minister agree that the sum is totally inadequate? Would he also agree that the White Fish Authority is bogged down by building grants and, as a result, owners are not able to carry on with forward planning? Can the right hon. Gentleman say how much of the sum which he mentioned is as yet unused?

Mr. Peart: I cannot do that. I do not believe that the sum is inadequate. I think that the balance is right. It is often difficult to make comparisons with the past, but I think that what we have done is reasonable.

Mr. Johnson: Is my right hon. Friend aware that applications for new vessels


total a little over £2 million and that we in West Hull, the capital of the deep sea fishing industry, thank him for a wise decision? We can plan ahead now until 1970.

Mr. Peart: I thank my hon. Friend very much.

Mr. Godber: There has been very considerable delay in this matter, whatever feelings there are about the figures—and I share the feelings of my hon. Friend the Member for Haltemprice (Mr. Wall). The owners are very concerned and they need to carry out long-term planning in this sort of industry. Cannot the right hon. Gentleman ensure that they are made more clearly aware of exactly where they stand in regard to the grants?

Mr. Peart: I congratulate the right hon. Gentleman on his first appearance at the Box as shadow Minister of Agriculture. The Authority will consider the applications. We must leave this matter to the Authority. I think that that is sensible. I would not try to destroy that practice.

Mr. Wall: In view of the unsatisfactory reply to the Question, I beg to give notice that I will try to raise the matter on the Adjournment.

Fisheries (Faroese Agreement)

Mr. Hector Hughes: asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the limits and effects of the agreement made on 1st October, 1965, between the British and Faroese fishing industries resulting from the unilateral extension by the Faroese Government of fishing limits around the Faroe Islands to 12 miles from base lines on 11th March, 1964, and recent relevant British legislation; and if he will indicate the consequences of this new agreement on the British fishing industry and British fish consumers.

Mr. Peart: This agreement allows an increase in fish imports from the Faroes from £850,000 to £1 million a year. There should be no significant effect on total supplies since imports from the Faroes have not in any year supplied as much as 2 per cent. of the market.

Mr. Hughes: Does the Minister realise that, owing to the events set out in my Question, the fishing industry faces "an

uncertain and challenging future," to quote the words of that authoritative journal the Aberdeen Press and Journal? Does he also realise that the fishing industry is as important to the people of this country as the farming industry and deserves to be just as generously treated?

Mr. Peart: Of course, I appreciate that the fishing industry must be recognised as much as the farming industry. But the agreement has been made by the catching side of the industry. The industry has made this agreement, and I should have thought that my hon. and learned Friend would approve it.

Australia and New Zealand (Minister's Visit)

Mr. James Scott-Hopkins: asked the Minister of Agriculture, Fisheries and Food if he will make a statement on his recent tour of Australia and New Zealand.

Mr. Gower: asked the Minister of Agriculture, Fisheries and Food if he will make a statement on his official visit to New Zealand; and what discussions he held there on the question of Great Britain entering the Common Market.

Mr. Peart: With permission, I will answer Question Nos. 10 and 11 together. [Interruption.] I recognise that the hon. Member for Barry (Mr. Gower) is not here. I was merely being courteous to him.
I would refer the hon. Member to the reply I gave to the hon. Member for Torrington (Mr. Peter Mills) on Wednesday, 27th October. I held no discussions on the question of Great Britain entering the Common Market.

Mr. Scott-Hopkins: I did not ask about the Common Market. Arising out of the Minister's reply, would he place in the Library a copy of the speeches which he made in Australia and New Zealand? Would he now further elaborate on what is meant by "a substantial share"—I gather that those were the words which the right hon. Gentleman used—of the rising demand in this country which he promised to New Zealand and Australian farmers? How much does this mean, and what does he intend?

Mr. Peart: I will be delighted to put a copy of my speech in the Library. I hope that the hon. Gentleman will read it and not distort it. I have repeated time and again in the House, even in reply to the hon. Gentleman, and I said over and over again in Australia and New Zealand, that the British farmer will make the major contribution to the increase in demand for food in this country by 1970. Before the hon. Member seeks to continue this line of thought, I hope that he will carefully read my speech.

Mr. George Y. Mackie: Does the right hon. Gentleman's reply, in which he said that he held no discussion on this important subject, mean that the Government do not intend to discuss the Common Market in any way? Should not he have discussed this extremely important subject when he was in New Zealand?

Mr. Peart: I did not discuss the Common Market. It is true that from time to time I was asked questions informally, but I had no formal discussions on this subject.

Sir Harmar Nicholls: On a point of order. It looks as though we are departing from an established practice. If an hon. Member is not here to ask a Question, he cannot have it answered. In fact, Question No. 11—

Mr. Speaker: Order. I hope that the hon. Gentleman will not waste valuable Question time. Two Questions were to be answered together. The hon. Gentleman who tabled the first one was not here. The hon. Gentleman who tabled the second one was here. What happened was in order.

Sir Harmar Nicholls: May I pursue my point of order? It is within the recollection of the House that the Answer given by the Minister was the answer to Question No. 10—

Mr. Speaker: Order. I would ask the hon. Gentleman not to waste the time of the House on trivialities. As I have said, two Questions were answered together; and there the matter must remain.

Mr. Godber: May I come back to the Question and the Minister's charge that my hon. Friends have been distorting? The right hon. Gentleman is grossly unfair. There were Press reports in this country—[HON. MEMBERS: "Question."]

Mr. Speaker: Even Front Bench Members must ask questions.

Mr. Godber: I apologise, Mr. Speaker. May I ask the Minister whether he is aware that there were Press reports while he was in Australia and New Zealand which certainly gave the impression that he had been speaking with two voices? If he says that that is not so, we accept it. I am asking him why he charged my hon. Friends with distorting what he said when they were relying on Press reports.

Mr. Peart: Last week I asked the hon. Member for Cornwall, North (Mr. Scott-Hopkins) for a categorical assurance that he would withdraw. He has not withdrawn. I ask him again to do so. I shall be delighted to put a copy of my speech in the Library.

Cereal Harvest

Mr. Wingfield Digby: asked the Minister of Agriculture, Fisheries and Food what estimate he has made of the loss to cereal farmers caused by the bad harvesting season this year.

Mr. John Mackie: The cereal harvest this year has been a difficult one, but, according to the latest reports, almost all of the cereals acreage has now been harvested to the extent that this year's weather conditions have allowed. It is not possible to make any precise estimate of possible losses.

Mr. Digby: When it comes to the next Price Review, will the Parliamentary Secretary bear in mind that certain areas, such as the West Country, have had a very long and costly harvest, and will he try to take account of that in the Review?

Mr. Mackie: Any review will take account of all increased costs which farmers are likely to have had. If it is proved that that is the case, they are always taken into account.

Agricultural Workers (Wages and Hours Agreement)

Mr. Kenneth Lewis: asked the Minister of Agriculture, Fisheries and Food whether he will consider introducing a supplementary price review in order to compensate farmers for the most recent wage


and hours agreement for agricultural workers.

Mr. Peart: No, Sir. The effect on farmers' costs is not sufficient to call for a special review under the terms of the agreement reached with the farmers' unions in 1956. But it will be taken into account at the 1966 Annual Review, together with all other relevant factors.

Intensive Animal Husbandry

Miss Quennell: asked the Minister of Agriculture, Fisheries and Food when he expects to receive the report of the Brambell Committee on intensive animal husbandry; and when he expects the report will be available to the House.

Mr. Peart: I would refer the hon. Member to the answer given to my hon. Friend the Member for Bury and Radcliffe (Mr. Ensor) on 1st November.

Miss Quennell: Does the right hon Gentleman still adhere to the promise which he gave me a year ago in reply to a Question in the House that as soon as the report was received he would publish it and act on it?

Mr. Peart: Certainly. But I must have the report published so that organisations in the country will be able to express opinions, since a considerable section of the agricultural industry is involved, apart from people who have other interests, and I think that we must wait for those discussions.

Mr. Snow: Is my right hon. Friend aware that in the minds of some people, including myself, the term "intensive animal husbandry" conceals something slightly disgusting?

Mr. Peart: I cannot accept that. My predecessor set up the Brambell Committee and one must fairly assess the report when one has read it. I hope, therefore, that hon. Members will carefully read it when it is published.

Inshore Fishing Vessels (Grants and Loans)

Mr. Bruce-Gardyne: asked the Minister of Agriculture, Fisheries and Food to what extent the sums available to the White Fish Authority for offering grants and loans towards the cost of boats built for the inland water fishing

fleet have been or will be curtailed by the Government's economy measures.

Mr. Peart: The Government naturally took account of the financial situation in deciding what funds could be made available for grants and loans for building fishing vessels, but the sums available for inshore vessels in fact represent an increase over the average in the past three years.

Mr. Bruce-Gardyne: Is it not a fact that the White Fish Authority asked to be able to spend up to £1 million in grants over the next three years, and do not the figures which the Minister has given the House represent a big cut? Is he aware that this is having a serious effect upon the small building yards in many of our fishing ports?

Mr. Peart: The hon. Member must not have heard what I said. I said that the sums available for inshore vessels represent an increase over the average of the past three years. The provision for grant approvals for inshore vessels in this financial year and next average over £280,000 compared with approvals averaging about £160,000 during the last three years. I could give other figures for the herring industry.

Corned Beef (Stocks)

Mr. Lipton: asked the Minister of Agriculture, Fisheries and Food what stocks of corned beef he now holds; and how he will dispose of these stocks.

Mr. Peart: I cannot give details of Government stocks of corned beef because they are held for defence purposes. Stocks nearing the end of their storage life are normally sold, but I have recently announced that no Government stocks known to have been produced under unsatisfactory conditions will be released.

Mr. Lipton: Now that the Government and the main importers have agreed not to retail the corned beef that was withdrawn from the market after the Aberdeen typhoid epidemic, will not the Government go one stage further, ban the sale of the remaining stocks in private hands and provide complete security to the public by dumping the whole lot in the sea?

Mr. Peart: I have stated my position concerning the stocks which I hold. I cannot go beyond that.

Small Farms (Amalgamation)

Mr. Wolrige-Gordon: asked the Minister of Agriculture, Fisheries and Food what developments have taken place in the amalgamation of small farms since he announced his plans to assist this process.

Mr. John Mackie: It is only three months since we announced our proposals. Our discussions with the interested organisations have not suggested that there have been any special developments during this period.

Farming Industry (Import Saving)

Mr. Wolrige-Gordon: asked the Minister of Agriculture, Fisheries and Food what estimate he has made of the savings to the import bill which have been contributed by the farming industry so far this year; and how this figure compares with the previous year.

Mr. John Mackie: Reliable comparisons of import saving by the farming industry from one year to the next cannot be readily prepared from the available statistics. There is, however, every reason to expect that, as envisaged in the National Plan, agriculture will continue to increase its substantial contribution to import saving.

Mr. Wolrige-Gordon: Does not the hon. Gentleman agree that the savings to the import bill contributed by the agricultural industry are an important achievement? Should not the industry be encouraged by a far greater share in the home market than merely a part of the increase in demand which is caused by the natural increase in population?

Mr. Mackie: If the hon. Member would read carefully the appendix to the agricultural section of the National Plan, count the figures carefully and subtract the amount of grain from what the industry has said it is technically possible to provide, he will find that the two figures are not far apart.

Mr. Godber: Will the hon. Gentleman kindly expand a little on his reference to the National Plan? Will he say a little about what is meant by a "major part" of the increased production and what will be the percentage which is produced from home farms?

Mr. Mackie: No, Sir.

Milk Marketing Board (Discussions)

Mr. Deedes: asked the Minister of Agriculture, Fisheries and Food what progress is being made in discussions, started with the Milk Marketing Board after the Price Review, on the marketing powers of the Board.

Mr. Peart: The discussions which have been taking place at the request of the Milk Marketing Boards and the farmers' unions on their proposals for introducing a greater degree of marketing flexibility are continuing.

Mr. Deedes: Can the Minister give any idea when these discussions are likely to be concluded?

Mr. Peart: I cannot give a specific date, but I hope that it will be as early as possible.

Dieldrin

Mr. Ennals: asked the Minister of Agriculture, Fisheries and Food what action he has taken to make known the dangers to wild birds and animal life of the use of dieldrin for sheep dipping; whether he is aware that in spite of the ban on production of this chemical many farmers have laid in several years' supply; and whether he will now take action to prohibit the use of dieldrin.

Mr. John Mackie: Apart from the original announcement of restrictions on the use of dieldrin, further Press notices have been issued reminding farmers of the restrictions and warning against stockpiling. I have heard allegations that some farmers have laid in supplies of dieldrin sheep dip, but these allegations have not been substantiated.
My right hon. Friend has at present no statutory powers to prohibit the use of dieldrin. The Advisory Committee on Pesticides and other Toxic Chemicals is considering the need for further controls on all pesticides and will also consider the remaining uses of dieldrin in 1967.

Oral Answers to Questions — SCOTLAND

Forth Road Bridge (Tolls)

Mr. William Hamilton: asked the Secretary of State for Scotland whether he will now remove the tolls from the Forth Road Bridge.

The Secretary of State for Scotland (Mr. William Ross): No, Sir.

Mr. Hamilton: Can my right hon. Friend say whether a firm decision has already been taken by the Government on this matter? If not, will he assure the House that when a decision is taken he will also publish the detailed statistics on which the decision was based?

Mr. Ross: I assure my hon. Friend that no decision has been taken. My hon. Friend the Under-Secretary gave information concerning the procedure yesterday and I have nothing to add to what he said.

Cadco (Committee's Findings)

Mr. William Hamilton: asked the Secretary of State for Scotland what action the Lord Advocate intends to take as a result of the findings of the committee of inquiry into the Cadco affair.

Mr. Ross: The report which was sent to my right hon. Friend the Lord Advocate by the Board of Trade discloses matters which call for investigation by the criminal authorities. Accordingly, inquiries are being made by him.

Mr. Hamilton: Can my right hon. Friend give the House any idea when these inquiries will be completed? Must it be assumed that all reports will be withheld from the public until the decision is taken and until court proceedings are finalised?

Mr. Ross: As to timing, I cannot say. All that I can assure my hon. Friend is that the inquiries are being pursued energetically. As to the report which is the subject of the Answer, it is important that nothing further should be said that might prejudice possible legal proceedings in due course.

Petrol Filling Station, Glasgow (Planning Permission)

Mr. Rankin: asked the Secretary of State for Scotland why he has given planning permission for the building of a petrol filling station near the corner of Netherauldhouse Road and Auldhouse Road in Glasgow S3, in view of the fact that Glasgow Corporation had refused to allow this project to proceed because the site was dangerously situated and for other reasons.

Mr. Ross: I am sending my hon. Friend a copy of the report on the inquiry into this planning appeal and of the letter conveying my predecessor's decision.

Mr. Rankin: Is my right hon. Friend aware that already in Netherauldhouse Road three petrol stations have been completed in the last four years and that a fourth already exists? Is he further aware that the corporation wanted to use the site for building houses? Would it not have been better to use the bricks for building homes for a city where homes are in scarce supply than to use them for petrol stations?

Mr. Ross: My hon. Friend is aware of the statutory obligation of the Secretary of State for Scotland in these matters: he is the final court of appeal. That means that, subject to an inquiry, he makes up his mind one way or the other. The case for the corporation was fully deployed at the time and I agree with the decision reached by my predecessor.

Houses (Compulsory Purchase)

Mr. Gregor Mackenzie: asked the Secretary of State for Scotland if he will introduce legislation which will permit local authorities to acquire by compulsory purchase groups of houses falling into middle-life category and to develop such areas in a comprehensive plan.

Mr. Ross: Local authorities already have extensive powers of compulsory purchase for these purposes under the Housing and Planning Act. If my hon. Friend, or any hon. Member, has evidence of any inadequacy under present legislation, I would welcome this information.

Mr. Mackenzie: I thank my right hon. Friend.

Old Houses (Renovation)

Mr. Gregor Mackenzie: asked the Secretary of State for Scotland if he will make a study of relative costs of renovating and bringing up to date older houses in Scotland; and if he will then give advice to local authorities who wish to carry out such programmes as to how overall costs might be reduced.

Mr. Ross: I will certainly consider this suggestion. A great deal is already


known, and my Department is always ready to give advice to local authorities about improvement schemes and their costs.

Mr. Mackenzie: May I ask my right hon. Friend if he is aware that there is a very great need, on social if not wholly economic grounds, for programmes of this kind to be engaged in at the earliest possible opportunity, but that many local authorities feel that the cost involved is far too high, and, I am sure, would welcome some assistance from research undertaken by his Department?

Mr. Ross: Yes, indeed, and we are prepared to provide this, because our aim and purpose is to get very speedy improvement as far as possible in this respect. Results over the years have been disappointing. There are reasons for it, but if they are financial I am prepared to look at them.

Edinburgh (Conferences)

Mr. G. Campbell: asked the Secretary of State for Scotland whether he will take action to encourage the use of Edinburgh as a conference centre by the United Nations, its agencies and other international bodies.

Mr. Ross: Yes, Sir, wherever appropriate. We have recently had the successful example of the first Commonwealth Medical Conference which met in Edinburgh last month.

Mr. Campbell: In view of the increasing congestion in London, will the Secretary of State draw his colleagues' attention to the very successful E.F.T.A. Ministers' conference which was held in Edinburgh in the summer of 1964—though it was, admittedly, before the time of the import surcharge?

Mr. Ross: Let us miss out a little bit of the tail and concentrate on the real matter in the question. There have been 12 non-governmental conferences in Edinburgh, and there is every indication that Edinburgh is attracting to itself this kind of conference. My concern is to ensure that the facilities which Edinburgh has to offer are made as widely known as possible to those likely to hold such conferences.

Water Supplies (Fluoridation)

Mr. Rankin: asked the Secretary of State for Scotland how many water supply authorities in Scotland have decided to add the poisonous compound sodium fluoride to their supplies of drinking water.

Mr. Ross: To date, 12 Scottish local health authorities have received approval to make arrangements for the fluoridation of the water supplies in their areas. The advice of my Standing Medical Advisory Committee is that in the recommended concentration of one part per million fluoride is not harmful to health.

Mr. Rankin: Is my right hon. Friend aware that a great many people do not accept the view which he has enunciated? Is he further aware that one of the authorities is Kilmarnock Town Council which, after five years' experimentation, decided to have nothing to do with this tampering with our water supplies? Does he further realise that Paisley Town Council has decided to have nothing to do with it because this poisonous compound may affect the thread industry in Paisley? Is he further aware—

Hon. Members: No. Too long.

Mr. Speaker: That is quite enough.

Mr. Ross: I can assure my hon. Friend that it does not surprise me—nor should it surprise him, nor should he read too much into the fact—that some local authorities come down on one side and some on the other. It is a matter entirely up to their discretion. As far as Kilmarnock is concerned, I am very familiar with the hon. Member for Kilmarnock, and I can assure him that during the trial period in that area there was no evidence of any harmful effects either to individuals or to industry—and we have in Kilmarnock very considerable and important industries not unconnected with certain liquids.

Mr. Speaker: That answer was too long, too.

Mr. Rankin: On a point of order. I beg to give notice, Mr. Speaker, that I shall raise this matter on the Adjournment.

Mr. David Steel: rose—

Mr. Speaker: I would explain to the hon. Member that what the hon. Member for Glasgow, Govan (Mr. Rankin) has just done precludes me from calling him.

Seaside Resorts (Bathing Fatalities)

Mr. Dempsey: asked the Secretary of State for Scotland if he is aware of the growing number of bathing fatalities at seaside resorts; and if he will circularise local authorities with a view to their employing teams of lifesavers, especially during the holiday period.

Mr. Ross: I share my hon. Friend's concern over the bathing accidents which occur each summer, but I have no information about whether they are increasing in numbers. Local authorities of seaside resorts do appreciate the importance of making their beaches as safe as possible.

Mr. Dempsey: Would it be possible, Mr. Speaker, for me to ask my right hon. Friend for some sort of thing to be done from his Department to try to persuade local authorities in Scotland of the importance of having some individuals such as lifesavers on duty during these busy periods? Does he realise, for example, that some parents nowadays are visiting seaside resorts with considerable fear and alarm at the possible consequences? Would he use his good offices to try to allay their fears?

Mr. Ross: Yes, indeed; but I think my hon. Friend should appreciate that seaside resorts in Scotland are themselves the first to take action when they feel that warning notices or any other preventive measures are required to be taken.

Medical Certificates (Doctors' Charges)

Mr. Dempsey: asked the Secretary of State for Scotland if he will seek to regulate the charges for medical certificates made by general practitioners under the National Health Service; and if he will make a statement.

Mr. Ross: General practitioners in the National Health Service are required to issue free of charge certificates for certain statutory purposes which are listed in regulations. I have no power to regulate the charges made by doctors for other types of certificate, but my right hon.

Friend the Minister of Health and I have recently asked both sides of industry to do all they can to reduce the need for private certificates.

Mr. Dempsey: Is my right hon. Friend aware of the tremendous variety of charges, which range nowadays from as low as 2s. 6d. to as high, I am told, in some cases as five guineas for a simple medical certificate assisting someone in a quest for a municipal house? Does he not think the time has now arrived to adjust this matter by having some understanding as regards a regulated charge for all sorts of certificates issued by general practitioners in Scotland?

Mr. Ross: If my hon. Friend has any information about unreasonable demands in this respect I should be glad to have it, but I think he should appreciate that it would be unfair and not right to expect the National Health Service to bear the cost of all private certificates.

Fishery Training Scheme (Western Isles)

Mr. Malcolm MacMillan: asked the Secretary of State for Scotland whether he is aware of the success of the Fishery Training Scheme in the Western Isles, of the demand for its revival and continuation, and of the large number of young and suitable seamen and fishermen anxious to be trained and acquire fishing vessels; and what action he intends to take to continue and extend the scheme.

Mr. Ross: I know that the scheme has achieved its primary object of establishing a fleet in the Outer Isles manned by local fishermen, and that they have been fishing successfully. I have received many representations for the continuation and extension of the scheme and I am arranging for this question to be discussed with the Highlands and Islands Development Board and other authorities concerned.

Mr. MacMillan: I am obliged to my right hon. Friend for his assurance. May I ask him if he is aware that this scheme originated from the Highland Panel and was primarily put into operation by the Fisheries Department and that there is no need to go into any long investigation in order to extend this scheme which has proved to be successful, while there are excellent crews and fishermen waiting


now for boats, and shipbuilding yards in Scotland awaiting orders?

Mr. Ross: I am sure my hon. Friend appreciates that the Highlands Development Board is already in existence and that it will be sufficient to deal with this special problem.

Mr. Stodart: Would the right hon. Gentleman tell us, of the 12 boats, which, I believe, was the number involved, how many have shown a real and substantial success? Have they all, as we all hoped they would?

Mr. Ross: Not without notice, particularly in relation to each of the 12; but, generally speaking, it has been successful.

Mr. George Y. Mackie: Is the Secretary of State aware that the feeling of the hon. Member for the Western Isles (Mr. Malcolm MacMillan) that action should be taken immediately is shared by other Highland Members, and that many of the young men on the west coast of Sutherland would like to take part in this scheme? If we wait till the Board examines all the possibilities, it appears to me that that will cause unnecessary delay.

Mr. Ross: I think that if we examine all the possibilities we shall be doing the right thing. Time spent in seeing if we can revive the scheme is essential delay.

Gaelic

Mr. Malcolm MacMillan: asked the Secretary of State for Scotland if he will appoint a committee to clarify the legal status of the Gaelic language and to consider what changes in the law ought to be made.

Mr. Ross: I doubt whether the appointment of such a committee would be justified, but before making up my mind, I wish to consider the report on Gaelic, based on the 1961 Census, which will be published early next year.

Mr. MacMillan: My right hon. Friend is the Secretary of State for all Scotland, including the Gaelic-speaking area, and may I ask him to take into account the fact that a Minister in the last Government saw fit on his own initiative to set up a committee on the status of the Welsh language, including such questions as its

equal validity and status in the courts, and so forth? Will he receive delegations and representations from authentic Highland sources before he finally makes up his mind, and not look at this merely in terms of the Census background?

Mr. Ross: This is not against the Census background; it is an actual report on this matter. I shall be very glad to receive representations from my hon. Friend or any other Highland Member who is concerned about this.

Mr. Clark Hutchison: Why cannot the Government Law Officers clarify the status of this language?

Mr. Ross: Because there is no need to.

Seal Cull (Orkney)

Mr. Grimond: asked the Secretary of State for Scotland how many new-born seals are to be slaughtered this year in Orkney; and what precautions are being taken to see that the slaughter is controlled.

Mr. Ross: A cull of 750 seal pups will take place this month under the same controls as operated last year. Permits will be issued to seal hunters and the number of seals each is entitled to kill and the area and period within which this may be done will be specified. Permit holders will be obliged to send their seal skins through a central point in Orkney where they will be checked.

Mr. Grimond: I am grateful to the right hon. Gentleman for that Answer, but may I ask him to bear in mind that last year the cull was considerably exceeded, and may we hope that that will not occur again?

Mr. Ross: Yes, indeed, we will bear that matter in mind.

University of Dundee (Draft Charter)

Mr. Hannan: asked the Secretary of State for Scotland if he is aware of the dissatisfaction of students and members of the Association of University Teachers, Scotland, in respect of the proposed draft charter for the university of Dundee; and whether he will seek to ensure, through the Committee of the Privy Council to which petitions for grant of university charters are referred, that the representation of non-professorial


staff on the governing bodies and the scope of academic planning are comparable with the charters recently granted to new universities.

Mr. Ross: When the draft Charter is submitted to the appropriate Privy Council Committee by the university I shall keep in mind the points my hon. Friend has raised.

Mr. Hannan: While thanking my right hon. Friend for that reply, may I ask why it is that the proposed new university at Dundee cannot make application on its own for a charter similar to those granted to the other new universities?

Mr. Ross: I think my hon. Friend will appreciate that what he is discussing in this Question is a draft. It will be a long time before it gets to the Privy Council stage, but when it does I will bear his representations in mind.

Scottish Universities (Royal Commission)

Mr. Hannan: asked the Secretary of State for Scotland if he will advise the appointment of a Royal Commission on the Scottish universities.

Mr. Ross: No, Sir.

Mr. Hannan: As it would appear that the Government have accepted the proposals of the establishment of the Scottish universities that the 1889 University Act should be amended, as opposed to the proposal and recommendation of the Robbins Committee that that Act should be repealed, would not it be of great advantage to have such a Royal Commission so that there could be a full examination of the internal government of the traditional universities, and the innovation of new fields of study?

Mr. Ross: I do not think that the problem which my hon. Friend has mentioned is something which merits a Royal Commission.

Solway Firth Barrage (Feasibility Study)

Mr. Monro: asked the Secretary of State for Scotland if he has accepted the offer of Messrs. Babtie, Shaw and Morton to undertake a feasibility study of the Solway Firth Barrage at a cost of

£300,000; when the study will begin; and when it should be completed.

Mr. Ross: As a result of the moratorium on certain kinds of capital expenditure announced in July by my right hon. Friend the Chancellor of the Exchequer, it is not possible to proceed immediately with the full-scale feasibility study into the Solway Firth Barrage. I am glad to announce however that, after consultation with Messrs. Babtie, Shaw and Morton, it has been possible to arrange for them to start a preliminary study right away at a cost of some £10,000 to £15,000 into the quantity and quality of water that would be made available by a barrage.

Mr. Monro: Is the right hon. Gentleman aware that his failure to proceed with a full technical investigation will cause grave disappointment? Would he agree that a social and economic survey is of equal importance?

Mr. Ross: Yes, Sir. I think the hon. Gentleman should appreciate that what we are doing is making a start, and that will not prejudice the feasibility study that was originally the concern of the same consultants.

STAFFORDSHIRE ASSIZES (JUDGE'S COMMENTS)

Mr. Snow: asked the Attorney-General if he is aware of the observation of Mr. Justice Glyn Jones at the Staffordshire Assizes at the trial of John Brown concerning proceedings against his employers and their transport manager; and what action is being taken.

The Attorney-General (Sir Elwyn Jones): Inquiries are being made into the matters commented on by Mr. Justice Glyn Jones but have not yet been completed.

Mr. Snow: In view of the suggestion made by the learned judge about a bill of indictment—in other words, further proceedings—in the case of this terrible accident, does my right hon. and learned Friend accept that the case can to some extent be considered still sub judice, and is he aware that it is absolutely imperative that the greatest diligence should be shown in taking this case further to another court if necessary?

The Attorney-General: Inquiries are still taking place into the matter, and I should have thought that the prudent course, therefore, would be to assume that the mater is still sub judice.

Oral Answers to Questions — MINISTRY OF DEFENCE

Service Establishments (Cost of Upkeep)

Mr. Newens: asked the Secretary of State for Defence what is the total annual cost of upkeep in the current year of airfields, Army camps and other service establishments which are not fully used at the present time.

The Under-Secretary of State for Defence for the Army (Mr. G. W. Reynolds): About £180,000.

Mr. Newens: Can my hon. Friend say whether this includes the cost of upkeep of the airfields and establishments other than the 42 which are required for changing requirements in the course of the year, namely, those which have been declared redundant and those which are being rebuilt? Does not he think that there is a vast waste of resources in this situation, and will he give further consideration to the possibility of drastic economies and to using such facilities for civilian purposes, even if at a later stage these are required by the military authorities?

Mr. Reynolds: This does not include premises which are being rebuilt or which have an operational purpose. A large part of the money is required for the maintaining of runways—they have to be maintained to rather exacting standards—which are not in use at the moment, but for which there is still a possible operational requirement. I cannot accept that premises are being held unnecessarily. We are at present disposing of about 58,000 acres of land.

Director of Public Relations

Mr. Rowland: asked the Secretary of State for Defence if outside advice was taken before the appointment of Director of Public Relations was made.

The Secretary of State for Defence (Mr. Denis Healey): The decision was entirely mine. Before making it I took

into consideration all relevant factors including Mr. Edward Pickering's report on the Defence Public Relations organisation.

Mr. Rowland: While thanking the right hon. Gentleman for that reply, may I ask whether he is aware of the discontent of the professional Information Grade officers in this matter, and will he bear this in mind in making any future appointments to this post?

Mr. Healey: I am aware of the dissatisfaction, and I have already arranged for the Permanent Under-Secretary for the Defence Secretariat to meet I.P.C.S. representatives to discuss considerations which might govern future appointments.

Territorial Army (Future)

Sir W. Anstruther-Gray: asked the Secretary of State for Defence what steps he took, before announcing his plans for the future of the Territorial Army, to consult Scottish Territorial Associations.

The Deputy Secretary of State for Defence and Minister of Defence for the Army (Mr. Frederick Mulley): None, Sir. The rôle of the Army Reserves, and their size and shape, are the responsibility of Ministers. This the Council of Territorial and Auxiliary Forces Association has recognised. We have however been discussing with the Council, which represents all Associations, the means by which our proposals should be given effect.

Sir W. Anstruther-Gray: Is the right hon. Gentleman aware that the lack of consultation has caused grave concern because there is an impression that over large parts of the country it will be impossible for young men to volunteer for service in fighting Territorial Army units? In view of the fine record of these units in the last two wars, is the right hon. Gentleman satisfied that we can afford to deprive ourselves of that good voluntary manpower?

Mr. Mulley: One the first point, it was the wish of the House, and Questions were answered by my right hon. Friend the Prime Minister, that the House should be first informed of the Government's decision in principle. The details involved have been, and are still being,


discussed with the Associations and the Territorial Army Council, but quite clearly what the right hon. Gentleman has in mind may mean not reducing but increasing the present size of the T.A.

Mr. David Steel: Is the right hon. Gentleman aware that the Scottish Territorial Army Associations are willing to consider methods by which public expenditure can be saved, and will he take this into account in deciding whether to consult them in future?

Mr. Mulley: Consultation is one thing, decision is another. I think that my right hon. Friend the Chancellor of the Exchequer would not necessarily wish to discuss the whole range of public expenditure with the T.A. Associations in Scotland.

Mr. Powell: Would not it have been wise for the Government, before announcing their proposals, to ascertain by consultation with the T.A. Council whether they were practicable?

Mr. Mulley: I think that the right hon. Gentleman has enough experience of the difficulties of leakages in the Press to know that it would be impossible to conduct wide-scale consultation before the House was informed, and his predecessor, the shadow spokesman on that side of the House, asked specifically that the House of Commons should be informed first of our intentions. I think that that is right, and that was done.

Sir R. Thompson: asked the Secretary of State for Defence what consultations he has held with the Territorial Council on the future of the Territorial Army; and if he will make a statement.

Mr. Mulley: I cannot at this stage add to the Answers I gave on 27th October.

Sir R. Thompson: Is the right hon. Gentleman aware that what is really affronting the Territorial Army is the feeling that it was handed a death sentence, and that consultations were limited to the funeral details? If his future plans have any rôle for the voluntary peacetime soldier, does not he think that he ought to start now by saying that his services are better appreciated than is apparently the case?

Mr. Mulley: Perhaps the hon. Member does not know that since immediately after my right hon. Friend announced the broad plan for reorganisation—which must be the responsibility of the Government and which has been accepted to be the Government's responsibility by the Territorial Army Council—we have been willing and in fact have been consulting the Territorial Army Council over all the details involved, but we cannot consult it on what is essentially a matter of Government policy, which must be the responsibility of Ministers.

Aircraft Carrier (Proposed Purchase)

Mr. Wall: asked the Secretary of State for Defence if he will make a statement about the proposed purchase of an aircraft carrier from the United States of America.

Mr. Healey: No, Sir. We have not yet decided what part aircraft carriers should play in our plans for the 1970s, or whether the inclusion of an American carrier in them would be helpful. It is, however, one of the many options which we are studying.

Mr. Wall: Can the right hon. Gentleman say whether approaches have been made to the United States Government, and will he confirm that the object of the exercise is to provide an aircraft carrier capable of operating Phantoms until the new British carrier can be built?

Mr. Healey: We have been in consultation with the American Government to the extent necessary to enable us to clear our own minds about what would be involved in terms of cost, performance, and so on. I cannot at this stage say what are the various purposes which the purchase of an American carrier, if it were decided to purchase one, might serve.

Territorial Army Emergency Reserve (Service in Aden)

Colonel Sir T. Beamish: asked the Secretary of State for Defence how many members of the Territorial Army Emergency Reserve have been serving in Aden; and if he will give an assurance that all will be given two days' home leave on full pay for every month served overseas to compensate for the fact that it has been impossible to grant these men local leave


on this basis in accordance with their terms of engagement.

Mr. Mulley: Seven officers and 122 soldiers. The original terms of engagement for the Territorial Army Emergency Reserve did not provide for any leave, local or home. It was later proposed to grant local leave when practicable. As this was not possible in Aden, I have decided to grant six days home leave on full pay for members of the Territorial Army Emergency Reserve serving in all theatres in the present call-out.

Sir T. Beamish: While not suggesting that it was more than a coincidence that the Government changed their mind about both this Question and Question No. 46 the day after I put them on the Order Paper, may I ask the Minister whether he is none the less aware that it has given great pleasure to the Ever-Readies, who have done such excellent work in Aden in trying circumstances, to know that they are to get part of their bounty in addition to the leave that they were expecting, but is not he being rather parsimonious about the leave even now?

Mr. Mulley: The fact of the matter is that our predecessors, in devising the scheme, made no provision for any leave at all. We are considering this matter in conjunction with a number of other lessons which have been learnt as a result of this first call-out of the Reserves and I shall take the hon. and gallant Gentleman's point into account. I would add, however, that while we like to have him on our side in these matters, the Government machine is difficult to move in 24 hours, so his Questions were not a major factor in this decision.

Sir T. Beamish: asked the Secretary of State for Defence if he will arrange to pay all members of the Territorial Army Emergency Reserve about to return from Aden the unpaid portion of their annual bounty immediately on their return to this country in order to give them some spending money on leave.

Mr. Mulley: Yes, Sir; this is being done.

Sir T. Beamish: In that case, will the Minister congratulate me on moving the Government machine so fast?

Arms Expenditure

Mr. Frank Allaun: asked the Secretary of State for Defence if he will now make a statement on progress towards the proposed cuts in arms ependiture; and if he will state the approximate total expenditure he intends for 1966–67.

Mr. Healey: On the general question I have nothing at all to add at this stage to the statement which I made on 5th August; I would prefer not to make a forecast about expenditure in 1966–67 but it will, of course, be at a figure compatible with our 1969–70 target.

Mr. Allaun: Can my right hon. Friend assure the House that the current review could result in a lower ceiling than that announced in August, and that he would welcome this? Secondly, without giving us any details, can he confirm that next year's total will be less than the current year's?

Mr. Healey: No. I can assure the House that it is my purpose and the purpose of the Government in this review to ensure that we bring our commitments, our military task and military capabilities into balance with each other—something that has not been the case for many years past. We shall do so within the figure of £2,000 million.

Tactical Strike Aircraft

Mr. Frank Allaun: asked the Secretary of State for Defence, in view of the continuing deficit in the balance of payments and of his proposed reduction of arms expenditure, if he will forgo the option to buy F111A aeroplanes from the United States of America.

Sir Ian Orr-Ewing: asked the Secretary of State for Defence whether it remains the policy of Her Majesty's Government to take up the option to buy a small number of F111A's only if it is intended to take up the option for the main force of F111 Mark II.

Mr. Hastings: asked the Secretary of State for Defence when he expects to announce a decision on the future tactical strike aircraft for the Royal Air Force.

Mr. Healey: A decision on the future tactical strike aircraft for the Royal Air Force will be announced in the course


of the defence review. Our arrangements with the United States give us flexibility in deciding the numbers and timing of any orders for the F111 aircraft.

Mr. Allaun: For the two reasons stated in the Question, would it not be a double folly to buy any of these aircraft at all from America, even if long-term credits were granted?

Mr. Healey: No, Sir—not necessarily.

Sir Ian Orr-Ewing: We understood that the defence review might not appear until early next year, whereas the option on this aircraft runs out at the end of this year. Can the Minister resolve that difficulty? Secondly, he told us last week that he considered the Mark I version of this aircraft to be equivalent to the TSR2, whereas it had previously been understood that we were interested only in the Mark II.

Mr. Healey: On the first question, the defence review is a continuing process. I said that we would take this decision in the course of the defence review, so the incompatibility that the hon. Gentleman appeared to find in my remark was not there. On the second question, he will know that there are a number of possible varieties of the F111 aircraft—there are three or four already—with various types of electronic equipment to cater for various types of capability and rôle. I can assure him that the aircraft that we buy will be fully capable of carrying out all the tasks for which it was intended the TSR2 should be responsible, provided that in the course of the defence review we decide to retain the capability for carrying out those tasks.

Sir J. Eden: Can the Minister confirm that it would not be his intention to take up the option on the small number of aircraft required for training purposes unless he had also decided that the Royal Air Force would be equipped with the F111A in its developed version?

Mr. Healey: The hon. Member is quite right. It would not make very much sense to buy aircraft for training purposes if there were no intention of using them in operations.

Mr. James Johnson: asked the Secretary of State for Defence if he will make a statement regarding the future

use of the all-British Buccaneer plane by the Armed Forces particularly as an alternative to the American F111.

Mr. Healey: Buccaneer aircraft are already doing sterling service with the Royal Navy, and aircraft of the Mark II version are now becoming available in increasing numbers. As regards the latter part of the Question I would refer to the Answers I have given to similar Questions today.

Mr. Johnson: Is the Secretary of State aware that many first-class designers, particularly on Humberside, believe that our plane is better than the American one in this field? Would he give us a guarantee that work will be available at Hawker Siddeley for some years to come?

Mr. Healey: I am well aware of the enthusiasm of all our designers for their products and, on the second question, I will certainly give that guarantee.

Sir J. Eden: Before coming to a decision as to what tactical strike aircraft he should order for the Royal Air Force, will the right hon. Gentleman keep very much in mind the possible consequential effect of his decision on the British aircraft industry as a whole and on Anglo-European co-operation in this respect as well?

Mr. Healey: Certainly, but I think that hon. Members on both sides of the House would wish my main concern to be the operational effectiveness of the Royal Air Force.

Service Men (Separation from Families)

Mr. Hector Hughes: asked the Secretary of State for Defence if he is aware of the hardships caused to men serving in Her Majesty's Forces overseas as a result of their being separated from their wives and families; and if he will make a statement of the steps he is taking to avoid and mitigate that suffering.

The Minister of Defence for the Royal Navy (Mr. Christopher Mayhew): Yes, Sir. Officers and men are having to put up with more family separation than they used to, and more than they ought to. A main purpose of the current defence review is to bring the resources of the Services into balance with the tasks which the nation gives them. Meanwhile, we are doing what we can to relieve separation by building more married quarters,


by easing the rules about the occupation of hirings, and by sharing the work as fairly as we can.

Mr. Hughes: As my hon. Friend admits that these hardships exist and that the hardships referred to in my Question are in some cases endangering family solidarity and in others inducing serving members to purchase their discharges, it counteracts the recruiting campaign. What has he to say to that?

Mr. Mayhew: I am bound to accept that there is a great deal of truth in what my hon. and learned Friend says. There is no question but that this is a major problem facing all the Services.

Sir H. Harrison: Will the hon. Gentleman bear in mind the fact that in considering this problem sympathetically there is a strong case for much shorter postings overseas, with air transport, provided that the Service families who may have children at school are left in this country in Service homes?

Mr. Mayhew: We well understand that, and have made some progress. Equally, where, for operational reasons the men cannot go for only short periods, we think that as far as possible they should be accompanied by their families when they go abroad.

Portsmouth Dockyard (Graving Dock)

Brigadier Clarke: asked the Secretary of State for Defence what plans he now has for building a graving dock in Her Majesty's Dockyard, Portsmouth.

The Under-Secretary of State for Defence for the Royal Navy (Mr. J. P. W. Mallalieu): The need for the graving dock depends on decisions on the future of the carrier force but plans are in hand to meet the need should it arise.

Brigadier Clarke: Will the Minister speed up the building of this graving dock? Many people in this country would rather have a graving dock in Portsmouth than spend £6½ million on the Minister of Technology and his office.

Aircraft Carrier Programme

Brigadier Clarke: asked the Secretary of State for Defence when he will make an announcement regarding the

future aircraft carrier programme for the Royal Navy.

Mr. Healey: This is an extremely complex issue on which we must be certain that we reach the right conclusion. There is still some more work to be done before we can reach a final decision, but I shall make a final decision in the course of the defence review.

Brigadier Clarke: Does not the right hon. Gentleman realise that he gained a lot of popularity in the last election by promising bigger conventional forces—and that we have seen nothing of them to date?

Mr. Healey: No, Sir.

Injured Service Men (Notification of Next-of-Kin)

Mr. Murray: asked the Secretary of State for Defence (1) what official notification was given to the next-of-kin of Craftsman Keats (R.E.M.E.) attached to the 15/19th Hussars that he had received burns and was detained in the British Military Hospital, Hanover, Germany;
(2) what are the arrangements for informing next-of-kin of British Service men if they are injured or taken ill on active service.

Mr. Reynolds: None, Sir. Serious illness or injury is notified to next-of-kin by the Service authorities, but in less serious cases, as in the case of Craftsman Keats, where a Service man is able to do so it is considered preferable for him to write to his family himself.

Mr. Murray: I thank my hon Friend for that reply, but does not he think that it is a serious situation, when a Service man is due home on leave, that the first notification which his next-of-kin gets is a letter from him saying, "Dear Mother, I am in hospital"? Will not he see that in future commanding officers are given instructions that the next-of-kin should be informed of illness or injury?

Mr. Reynolds: No, Sir. It is much less of a shock to a family if a man is able to write home himself and say, "I am in hospital, but I do not feel too bad", rather than to receive a notification from the unit or the Department which could not give any personal details.

Army Exercise (Boy Soldier's Death)

Mr. Edelman: asked the Secretary of State for Defence whether he will make a statement on the circumstances in which a Coventry boy soldier serving with the Royal Warwickshire Fusiliers was drowned while on an Army Outward Bound School exercise; and what future added precautions he intends to take in order that the limits of reasonable risk should not be exceeded.

Mr. Reynolds: This boy soldier died after the canoe in which he was travelling overturned. When the coroner's inquest on his death has been completed the General Officer Commanding-in-Chief Western Command will consider whether any modification to existing instructions is required.

Mr. Edelman: Will my hon. Friend bear in mind in the meantime that in this tragic incident several canoes overturned, and it was only fortuitous that more lives were not lost? Will he consider tightening up the regulations so that canoes, which are ill-fitted for sea-going purposes, will not be used in such exercises?

Mr. Reynolds: We shall consider any points that arise, but I think it would be better to leave it to the coroner and the inquest first, so as to get all the information. Then we can look at it.

RHODESIA

The Prime Minister (Mr. Harold Wilson): With permission, Mr. Speaker, I should like to make a further statement on Rhodesia.
On Monday I said that the two Governments had agreed in principle to recommend to Her Majesty the appointment of a Royal Commission for the purpose of testing the acceptability to the Rhodesian people as a whole of a draft independence arrangement which, we hoped, would be agreed between the two Governments and would be based on the 1961 Constitution with such amendments as we might consider necessary. I went on to say that the two Governments were in discussion to see whether it was possible to agree on the text of a document which the Royal Commission could take for this purpose.
My right hon. Friend the Secretary of State for Commonwealth Relations and my right hon. and learned Friend the Attorney-General have now returned and reported on their discussions. It is now clear that there is no prospect—and the House would realise from what I said on Monday the kind of issues involved—of agreement being reached on the amendments which should be made to the 1961 Constitution, as a basis for use by the Royal Commission.
In these circumstances we have had to consider our position. This we have done with a deep sense of the responsibility lying upon us for ensuring that this House, before there is any question of its being asked to take a decision about independence, should have before it an authoritative statement of the views of the Rhodesian people as a whole on particular proposals for independence. Mr. Smith considers that independence on the basis of the 1961 Constitution is acceptable to the Rhodesian people. Neither we nor our predecessors have been able to accept this as a fact without the most rigorous proof being forthcoming.
In this connection I must refer to statements made yesterday by Mr. Smith about the discussions he had with my predecessor, the right hon. Gentleman the Member for Kinross and West Perthshire (Sir Alec Douglas-Home), in September 1964. Mr. Smith said yesterday that he had made an agreement with my predecessor that Rhodesia could have independence on the 1961 Constitution, if it could be proved that this was acceptable to the people of Rhodesia as a whole.
I want to make it clear that we do not accept this interpretation and we are so informing Mr. Smith. The right hon. Gentleman made it crystal clear again and again that the British Government had as yet no evidence that the majority of the population supported the Rhodesian request for independence on the basis of the present constitution and franchise, and indeed in the final agreed communiqué, the following statement occurs:
The British Prime Minister said that the British Government would take account of any views which might be freely expressed by the population on the issues involved; but he must make it plain that the British Government reserved their position.


Against that background and unequivocally re-confirming the statement I have just quoted, the British Government have decided and I am so informing Mr. Smith that we are now prepared to agree, subject to certain conditions shall outline, that the Rhodesian's Government's constitutional proposals should be put to the test of acceptability to the people of Rhodesia as a whole.
But if this is to be done it must be known that we ourselves disagree with these proposals for the reasons I stated on Monday and which I shall not weary the House by repeating. Indeed, Mr. Smith himself recognised in his broadcast on Monday night that we disagree with them.
Second, we continue to hold the view that the Royal Commission, before canvassing the views of the Rhodesian people as a whole, should submit for approval by both Governments a unanimous interim report on how they would propose to determine acceptability. If the Royal Commission's suggestions for this purpose were approved, they should themselves supervise whatever procedures were adopted in order to implement their findings.
Third, when the Royal Commission have completed the process of ascertaining the opinion of the people of Rhodesia as a whole, they will submit a final report which we have agreed must be unanimous. The British Government cannot, of course, be expected to commit themselves in advance to accept that report, particularly as, in any case, the eventual decision rests with Parliament alone.
But I must also inform the House that we are making it clear to the Rhodesian Government—and I do not want there to be any misunderstanding about this here, in Rhodesia, or anywhere else—that if, in the event, the Royal Commission's findings showed that the Rhodesian Government's proposal was unacceptable to the people of Rhodesia as a whole, the British Government reserve their freedom of action as to the future course to be followed. We would feel free to pursue other means of dealing with the problem such as reviving our earlier suggestion of a Royal Commission with the substantive task of devising a new Constitution of Rhodesia, or our proposal that the issue

should then be remitted to a Constitutional Conference.
I greatly hope—and I am sure the House will share this hope—that, after all the efforts that have been made in these past few weeks to secure a solution fulfilling all the requirements of honour and of justice, that what I have said will enable us to go ahead with the Royal Commission, on the principle of which we agreed last week, and that the Royal Commission can get down to its vitally important work without delay.
If what I have said is unacceptable to the Rhodesian Government—though I am sure the whole House would find it difficult to believe that this could not be acceptable to them—I have one last alternative proposition, which I have put to Mr. Smith, as a fall-back on which agreement could still be reached. We should still be willing, as an alternative to the Royal Commission, to agree that the Rhodesian Government's Constitutional proposals should be submitted to the test of a referendum of the whole Rhodesian people, provided that it was conducted without restriction on free political activity by all sections of the community, provided that it was subject to adequate impartial supervision, and provided that it incorporated stringent safeguards against intimidation from any quarter.
I will, of course, keep the House fully informed of any further development.

Mr. Heath: We appreciate, of course, the great difficulties under which the Prime Minister and his colleagues are working at the moment and the pressure of time and communications with Salisbury. Therefore, we appreciate the reasons why he has not been able to extend to us the usual courtesies of a reasonable time to consider his statement beforehand.
The whole House will have heard with the deepest disappointment that it has not been possible to reach agreement on a draft document which could be presented to the Commission. Do I understand the position aright—that the Prime Minister has now reserved the British Government's position at every stage; on the actual proposals which will be put forward by the Commission to the people of Rhodesia, on the interim report, as to the procedure which is to be used, and, if that is agreed, on the final decision to


which the Commission comes? Can he tell the House anything about the present proposals of the Government of Rhodesia which will, if his new proposal is accepted, be put to the people by the Commission? Have there been any changes in the last proposal which the Government made?

The Prime Minister: I am sorry that it was not possible to send an earlier copy, for the reasons which the right hon. Gentleman knows. The other day I made certain he got one unusually early when that was in my control. I share his disappointment that we have not reached agreement on the document. The reason is that we have stood firm on the principles which I outlined on Monday, which would have made it impossible to agree to the Rhodesian Government's proposal, which is, basically, the 1961 Constitution with certain consequential amendments which are necessary when a country proceeds from a position of dependence to a position of independence, but also, of course, including their proposition for extending the number of voters on the B roll. That is the only difference we have.
As to his understanding of the position, I entirely agree with the way in which he has summarised it. Of course, there is still no agreement on the interim report. He is quite right that, on the method of consultation, on the final report and certainly on any action by this House, we fully reserve the position of Her Majesty's Government and of this Parliament throughout.

Mr. Grimond: While regretting that the proposals put before the House and the Rhodesian Government by the Prime Minister have been rejected, may there not be some disquiet, now that, as I understand it, the proposals put forward by the Rhodesian Government will not contain proposals for the implementation of the five principles, which the Prime Minister told us in his last statement were essential to the draft agreement? Does it mean, therefore, that the British Government will appoint a member of the Commission who will put before the Rhodesian people proposals which are not acceptable to the British Government themselves?

The Prime Minister: We have made it quite clear that we do not regard this

Constitution as now proposed as satisfactory and we have reserved our position as to the ultimate outcome, as did the Government before us. Mr. Smith all along has argued, indeed for three years he and his predecessors have argued, that they have the support of the Rhodesian people as a whole. He quoted indabas of chiefs and all sorts of things in support of the argument. Both our predecessors and ourselves are entirely unsatisfied that that is the position. All right; we will put it to the test. If it turns out that the Rhodesian people as a whole, on terms that all of us would consider fair as an indication of their view, reject it, then, of course, Mr. Smith's case falls to the ground. If, on the other hand, they accept it, then we still reserve our position as to the course of action to be taken.

Sir Alec Douglas-Home: May I be allowed to confirm the interpretation which the Prime Minister has put on the talks of 1964? It seems to me important that this should be done. We were not satisfied at that time that there were sufficient safeguards against retrogression in the position of the Africans, and we were not satisfied, either, that the proposals before us for ascertaining the will of the people of Rhodesia were sufficient or sufficiently defined. Will the Prime Minister find some convenient way of letting the House know on what particular points in the five principles the talks have broken down? It seems to me that at one time there was considerable progress, but now there seems to be deadlock. I do not know whether the Commonwealth Secretary would be able to enlighten us at some time.

The Prime Minister: I hope that there might be an opportunity of going into the details. I am not sure that it would be helpful to go into every point at the moment. On the question of guarantees against retrogression, we feel that these are essential to this agreement, and we insisted on this staying in if our name were to be attached to the document, which was to be the subject of ascertaining the views of the people of Rhodesia as a whole. May I thank the right hon. Gentleman for confirming what I said earlier about his attitude last year? Anyone who reads the full text of what he said and what his colleagues said, to say nothing of the communiqué which I have


quoted, can be in no doubt at all that the right hon. Gentleman made the point about ascertainment and about reserving the Government's position crystal clear again and again.

Mr. Ennals: Is the Prime Minister aware that some of us are greatly concerned by the statement which he has made this afternoon? In view of the fact that the position of the Rhodesian Government about independence has been on countless times challenged on both sides of the House and by the Prime Minister himself in countless statements, is it not quite wrong that that proposal should be submitted for consideration to the Rhodesian people? Does not this conflict with the statement which the Prime Minister made on Monday that the five principles would have to be part of the statement submitted to the Commission? Is it not now possible that Mr. Smith could gain independence for Rhodesia on the basis of terms which month after month and year after year have been rejected by this and previous Governments?

The Prime Minister: I made it clear on Monday that those points necessary to give effect to the five principles must be included in any document to which we set our seal. Since this is impossible, we are faced with the position of what to do. If my hon. Friend thinks that the people of Rhodesia as a whole are likely to accept this constitution, then I must say that it is a very big change from the attitude taken by him and many other hon. Members. What we have to do now is to see whether they accept it or whether they do not accept it. This is not giving carte blanche for independence. Not at all. We have fully reserved our position, but obviously we have a right to know whether Mr. Smith is correct in saying that the Rhodesian people as a whole back him. We shall find that out.

Sir H. Legge-Bourke: The Prime Minister will appreciate that since his earlier statement a very provocative and, in my view, regrettable resolution has been passed in the Trusteeship Committee of the United Nations—a resolution which I understand is likely to be endorsed by the General Assembly. In his statement this afternoon the Prime

Minister said that in the last resort perhaps there might be a referendum supervised by an independent body. Does he visualise that being the United Nations? [HON. MEMBERS: "Why not?"] If so, would the Prime Minister bear in mind the very great danger, if we were to take that view, of giving the United Nations there power which really they do not have and which the Trusteeship Committee is abusing?

The Prime Minister: While I do not agree with the last few words of the hon. and gallant Gentleman nor with some of the interjections during his remarks about the United Nations, nevertheless I take the view, as I said on Monday, that the referendum requires outside supervision, not only as to the ballot box procedure, but as to freedom of political association; but, as I said on Monday, I think that the appropriate authority to provide that impartial supervision is the British Government on terms acceptable to the British Parliament, because it is our responsibility and we have the duty of ensuring that this referendum is carried through on a free basis—as we should have to face any consequent responsibility—and with guarantees against intimidation from any quarter.

Sir K. Pickthorn: Since it is now plain that what the Prime Minister calls the unanimity rule has extreme urgency, could he explain it to us a little? Does what he calls the unanimity rule mean that every member of the Commission will be conscious throughout that there can be nothing in the report which has not received the assent and consent of each one of the three members?

The Prime Minister: The hon. Member is correct. The statement means that at the end of the day the Royal Commission will report saying either "Yes, this is acceptable to the people of Rhodesia as a whole" or "No, it is not". It must be a unanimous report.

Mrs. Shirley Williams: Since the Prime Minister will appreciate how strongly the Prime Minister of Rhodesia will wish to prove that he has the support of the Rhodesian community for the 1961 Constitution, may I ask whether he could give the House any information about the type of supervision of this attitude of the Rhodesian population which we


can expect from the Commission? Secondly, may I ask him whether it is possible to ascertain that, if accepted, the 1961 Constitution would be carried out in full, in the light of what happened to the Constitutional Committee under that Constitution?

The Prime Minister: If this is done on the basis of a Royal Commission, it will be for the Royal Commission to recommend the methods of supervision. Quite frankly, I am not yet in a position to say who the members will be, but I shall have the fullest confidence in that Commission to recommend methods of ascertainment which, in so far as they involve a direct popular referendum or means of finding out the views of the Rhodesian people, will be guaranteed to be free under whatever supervision is needed. Answering the second part of the question, I am in no doubt at all that if the Rhodesian Government now reject the idea of a Royal Commission—and I think that that is inconceivable—then under our proposal for a 100 per cent. referendum it will be our duty to see that there is adequate supervision.

Mr. Wall: Would the Prime Minister agree that both in London and in Salisbury the Rhodesian Government did move some way towards his point of view? May I therefore press him to get their agreement to publish the differences which still lie between the British and Rhodesian Governments? I do not believe that they are as great as all that.

The Prime Minister: I think that they are very great. They are great not merely as legal matters; they are great because of the political differences. I fear that they may represent something much deeper than that, deeper than simple political approaches to a problem. This is why we felt that since we could not reach agreement on the terms to go into the document of the Royal Commission, we could not endorse one put forward by the Rhodesian Government. It involves fundamental questions about retrogression.

Mr. Sydney Silverman: Will my right hon. Friend bear in mind that nearly everybody concedes to him the claim which he made the other day that he has done everything in a man's power to try

to bring this tragic and difficult situation to an end and that therefore this will offer him a firm support, in consequence, in not making any further concession which would go beyond what is reasonable?

The Prime Minister: I thank my hon. Friend, and I can say, as a result of this statement and what is being communicated to Mr. Smith, that the full rights of this House are completely reserved as to the terms of independence.

Mr. Thorpe: If there is failure to reach agreement on amendments to the 1961 Constitution, and since the Rhodesians are now pressing for independence on the basis of that Constitution—and since successive Governments have made it clear that there is inadequate support for independence on the basis of that Constitution—short of a complete referendum, what is the purpose of asking a Royal Commission to advise on the taking of opinions on a limited basis to reach a conclusion of which we are already well aware?

The Prime Minister: The point is that the previous Government and ourselves have not said that we are satisfied that there is no Rhodesian support for this. We have said that Mr. Smith's contention that there is support has never been proved and we have never been satisfied—either the previous Government or ourselves—about the methods which he suggested for finding it out. This is a chance to find it out once and for all, not on the basis of what he may have said or what the hon. Gentleman or we may think, but on a basis of fact, under a Royal Commission in which we can have confidence, as to whether Mr. Smith is right or wrong; and the consequences of finding that out can be very important.

Mr. Heath: May I follow the last supplementary question by asking the Prime Minister to clarify one point? Will it be the responsibility of the Royal Commission to define what is meant by "acceptable to the people of Rhodesia as a whole" as well as to ascertain whether that definition in fact exists in the country itself? If that is the case, an immense responsibility will rest on the Royal Commission and on the Prime Minister in the choice of his representative on it.

The Prime Minister: It is for the Commission to define what is meant by this, and I personally would have every confidence in its members' ability to do that and to test it out. If when the report was received we all felt that they had gone out of their senses and had defined as "acceptability" something that was clearly not acceptable, this House reserves its position. However, I think that the members of the Commission will not only be learned in the subject and other matters but will have a real knowledge of the issues and of the political realities in Rhodesia as well as elsewhere, and the political realities in Rhodesia will suggest that acceptability means not only acceptable to the present electorate but to a very much larger number of Rhodesians who are at present disfranchised.

Several Hon. Members: rose—

Mr. Speaker: Order.

Mr. Ennals: On a point of order—

Mr. Speaker: I appreciate that this is an important matter, but I must protect the business of the House. Mr. Ennals.

Mr. Ennals: On a point of order. When will Parliament have an opportunity of discussing this matter—[Interruption.] As I understand—

Mr. Speaker: Order. That is not a question which the hon. Gentleman can put to me. He must put it to the Government and find an opportunity for doing so.

Later—

Mr. Ennals: I beg to ask leave, Mr. Speaker, to move the Adjournment of the House, under Standing Order No. 9, to call attention to a definite matter of urgent public importance, namely,
The situation in Rhodesia and the decision of Her Majesty's Government to authorise a Royal Commission of three to consult the Rhodesian people concerning their acceptance or otherwise of independence on the basis of the 1961 Constitution.
In doing so I submit that it is not difficult to prove that this is a definite matter. It is a matter on which the Prime Minister has made a statement as newly to the House as this afternoon. I do not believe that it will be difficult to prove that this is a matter of public importance. The question of Rhodesian independence faces

the British Government with probably a bigger challenge than at any time since 1947 when independence was granted to India and Pakistan.
Certainly it is not difficult to prove that it is of public importance, in view of the fact that it has dominated the headlines of the newspapers over the weeks, that it has caused the Prime Minister to undertake the most serious and prolonged discussions in London and in Salisbury together with others of his principal Secretaries of State, and that it is an issue on which he has made two vital statements to the House in the course of three days.
I would submit also that it is not difficult to prove that it is a matter of urgency. On Monday, in answer to a Question from me, the Prime Minister said, of course rightly, that the decision on Rhodesian independence would require an Act of Parliament and, therefore, a decision of both Houses. But in answer to a Question that had been put by the right hon. Gentleman the Leader of the Liberal Party the Prime Minister said that if the Commission had reached agreement it would be difficult for this Parliament not to be influenced by the decision, and I would submit that it may be that if by some strange chance or mischance the proposal now before the Commission should be acceptable to the people of Rhodesia, then today or tomorrow, or before a final reply is sent to Salisbury, may be the only opportunity for the House of Commons to decide on what basis we are prepared to see independence granted to Rhodesia. This is a matter, as the Prime Minister has said many times, over which this Parliament is paramount. I submit, therefore, on the three points that I have made that it is a definite matter of urgent public importance.

Mr. Speaker: The hon. Member for Dover (Mr. Ennals) seeks, under Standing Order No. 9, to move the Adjournment of the House in order to draw attention to a definite matter of urgent public importance, namely,
The situation in Rhodesia and the decision of Her Majesty's Government to authorise a Royal Commission of three to consult the Rhodesian people concerning their acceptance or otherwise of independence on the basis of the 1961 Constitution.
For the benefit of new Members especially, may I point out that the House


has given me, under Standing Order No. 9, tremendous power—power to withhold or give consent to such an application for leave, not because the matter is not a serious one, but because the Chair has to be guided by the precedents which have established themselves over the years, in deciding that a certain matter which an hon. Member thinks ought to take precedence over the Orders of the Day shall or shall not take precedence.
I am bound in my decision by the Rulings of the Chair in previous similar occasions, and hon. Members will find examples of such Rulings on page 364 of Erskine May. The situation which the hon. Gentleman has argued with the Chair is a situation which only threatens to arise, and a situation which only threatens to arise, however grave the circumstances may be, or however serious they may be in the opinion of the Member who is seeking to move the Adjournment, does not fall within the Standing Order because it merely threatens. It may not, in the event, take place, or it may be varied by other intervening events. To that extent it remains hypothetical and so falls outside the Standing Order's requirements of a definite matter. When the hon. Gentleman argued that it was a definite matter, what he was really arguing was that there was a definite statement by the Prime Minister before the House.
The application for leave must also relate to a single specific matter and not, as in this case, to one of a series of related events. In these circumstances, I cannot allow the hon. Member's request for leave to move the Adjournment of the House. I am grateful to him for having given me notice this morning that he probably had this intention in mind.

WHITEHALL (REDEVELOPMENT)

The Minister of Public Building and Works (Mr. Charles Pannell): With permission, I will make a statement about the Government's plans for the redevelopment of Whitehall.
On 19th July, I announced to the House the Government's attitude towards the Martin and Buchanan Reports and made a declaration of intent about them.

I have recently received a letter indicating the strong general support of the Royal Fine Art Commission for the recommendations.
The Government now propose to take firm second steps about the architectural arrangements for three main buildings which will form the first stages of the development. These are the new Parliamentary building, the new Government offices on the Bridge Street and Richmond Terrace site, and the redevelopment of the Foreign Office site.
These three projects form a coherent development. Careful co-ordination is, therefore, essential, and I am glad to say that Sir Leslie Martin has agreed to continue to work with my Department as planning consultant for the area as a whole.
For the individual buildings we need a range of architectural talent. We shall keep in close touch with the views of Parliament about proposals for the Parliamentary building. We propose that the architect for this building should be selected by means of a competition open to the whole Commonwealth. The assessors would include at least one distinguished Commonwealth architect and consideration of the results of the competition would be entrusted to a small Committee of this House.
The design of the Government offices on the Bridge Street-Richmond Terrace site will be entrusted to my Department. For the new building on the Foreign Office site we have in mind that it would be appropriate to commission a distinguished architect in private practice.
The design of all three schemes should be based on a close study of the users' needs and on planning principles evolved in consultation with Sir Leslie Martin. In this work my Directorate General of Research and Development will take a prominent part.

Mr. Chichester-Clark: While welcoming certain aspects of the right hon. Gentleman's statement, is it not rather Martin without Buchanan, and should we not be taking the Buchanan part into consideration first in view of the fact that since 1947 traffic in Parliament Square has increased by 175 per cent. and looks like doubling by 1977? Would the right hon. Gentleman say what progress has been made with the Greater London


Council on this matter, and will it be possible for him to arrange, with his right hon. Friend, for an early debate on the Martin Report?

Mr. Pannell: It will be seen from the statement which I made on 19th July that we have entered into consultations with the Greater London Council and with the Ministry of Transport on this matter. Consultations on a matter of this sort are naturally lengthy, but we expect to hear about them by the end of the year. At present we are considering the proposals specifically in relation to the priorities laid down by the principal planner.

Mr. Driberg: While warmly welcoming my right hon. Friend's statement for the most part, may I ask him what the Royal Fine Art Commission specifically stated in its letter about the possible preservation of at least part of the existing Foreign Office building?

Mr. Pannell: As far as I remember, the Royal Fine Art Commission blessed the whole concept in principle. I would like notice of the other part of my hon. Friend's question, but I would be prepared to discuss the matter with him or write to him on the subject. The principal recommendation was that we should preserve Parliament and Westminster Abbey as the central precinct, and this has the Commission's warmest blessing.

Mr. Robert Cooke: Does the Minister not realise that it would seem to be a piecemeal approach, and not within the spirit of the whole plan, to plan certain buildings without the others? How does he hope to plan a suitable building in Bridge Street without taking into account the fact that the Report recommends the demolition of the Bryden Buildings on the other side of Whitehall? Is he aware that the acceptance by the Government of the plan to demolish the Foreign Office has met with grave concern outside, and what attention is he paying to the problem of traffic congestion?

Mr. Pannell: As to the destruction of the Foreign Office, that was a decision taken by the previous Administration, about which the hon. Gentleman did not raise a bleet.

Mr. Robert Cooke: Nonsense.

Mr. Pannell: I cannot really see that as we are considering three buildings—with the size involved and the sort of cost and time ahead with which we are concerned—it can be said to be a small development. There must be a start, and anyone who has read the Martin plan will know that one must move by stages in a logical sequence, as laid down in the plan. It is then easier to follow on with other stages.

Mr. Lubbock: What estimate has the right hon. Gentleman made of the additional traffic which will be generated by this redevelopment, and has any plan, apart from capital expenditure, been made in regard to traffic management schemes, for example, to alleviate the congestion before this redevelopment is completed?

Mr. Pannell: Again, I must refer to the previous statement which I made. In addition to what I said, we have asked for an urgent examination to be made of the riverside tunnel road, which would take off about 40 per cent. of the traffic from the precinct. That examination is taking place. In any case, I cannot make all the announcements at one time. Neither can they be synchronised. [HON. MEMBERS: "Why not?"] If hon. Members consider the statement which I made on 19th July and the progress which has been made, they will see that we have gone ahead at a galloping pace. I can only add that traffic studies are receiving urgent day-to-day consideration, and I shall be very glad when other people catch up with us and what has been achieved to date; and I will, of course, make another statement.

Mr. Channon: Why should the competition for the Parliamentary building be open only to architects from the Commonwealth? Why should it not be open to the whole world, in open competition, to compete for this vitally important Parliament building?

Mr. Pannell: I do not think that many people are as liberal-minded as the hon. Gentleman and I.

Several Hon. Members: rose—

Mr. Speaker: Order. There is an important debate ahead of us. We must move on.

NATIONAL PLAN

4.8 p.m.

The First Secretary of State and Secretary of State for Economic Affairs (Mr. George Brown): I beg to move,
That this House welcomes the National Plan (Command Paper No. 2764).

Mr. T. L. Iremonger: On a point of order. Would I be correct in assuming, Mr. Speaker, that the Amendment standing in my name on the Order Paper is not being called, namely, to leave out "welcomes" and insert "takes note of" and at the end to add:
congratulates Her Majesty's Government on the adoption of ideas and policies (especially the idea that most manufacturing industry and commerce is, and will continue to be, largely governed by the market economy) which Her Majesty's present advisers opposed and derided in previous years, and regrets that an instructive exercise in hopeful forecasting should be misleadingly presented as a plan".

Mr. Speaker: I am sorry. I should have mentioned that the Amendment in the hon. Gentleman's name is not selected.

Mr. Brown: I read the wording of the Motion because of its significance, and perhaps I could have the attention of the Leader of the Opposition while I do so. I am sure that he would like me to read the wording. When we understand, as we do, that the Leader of the Opposition is advising his right hon. and hon. Friends to accept a Motion to welcome the National Plan, one is very much impressed with the powers of change and conversion that still exist in this democracy of ours. When one remembers what the right hon. Gentleman said before he read the Plan and one realises that now that he has read it he welcomes it, there are obviously possibilities for it yet.
One looks for the right hon. Member for Wolverhampton, South-West (Mr. Powell), who not only called the Plan, as the Leader of the Opposition called it, the biggest publicity gimmick of all time—which the Leader of the Opposition now favours and which is welcome on the benches opposite—but who went even further and called it "a nonsense, a dangerous nonsense". The Plan is now welcomed by hon. and right hon. Members opposite. The Opposition had better make up their minds. If it was all the

things which they said it was before they read it but they do not now think so, that is a tribute to the Plan. If, on the other hand, they still think so but they have not got the courage to stand up and say it, that is not much of a tribute to them.
Even so, there is still a difference between the Leader of the Opposition and ourselves about it, and we had better have it clear. At Bristol last weekend, he made a speech, reported in The Guardian, in which he dropped his previous criticism of the Plan but went on to say that he was in favour of surveys, forecasts and studies. This really sums up the difference which still exists between us. We believe not only in surveys, forecasts and studies, but in commitments, decisions and action.

Mr. Edward Heath: By the Government.

Mr. Brown: The right hon. Gentleman says "by the Government". He cannot have it both ways, because in the same speech he objected to the Plan because there was not any commitment by the Government. Now he thinks that there is. He must make up his mind.
The right hon. Gentleman is quite right in that there is a commitment, there are decisions and there is action by the Government involved, which he is against, I gather from his speech the other day; and this is the difference between us. But, oddly enough—or perhaps not so oddly—the hope that this country may end the cycle of stop-go-stop, of stagnation and occasional insupportable booms, lies in the difference in our conception of planning from theirs. This is why, in our view, machinery is as important as planning, national machinery, industrial machinery and regional machinery, none of which was provided in the days of the right hon. Gentleman's Government.
The Plan is designed to achieve four main objectives. The first is to put right the balance of payments. Everything else we hope to do depends on this. The second is to speed up the rate of growth. Our target here expressed over the period 1964–70 is, as the House knows, a 25 per cent. increase. These two objectives, correcting the imbalance in our balance of payments situation and speeding up the rate of growth, are obviously closely related, and the improvement of our foreign


trade position and our faster growth depend to a large extent on the speed with which we can improve efficiency and productivity in British industry.
The third objective is to secure a better regional balance of development, to put an end to the situation in which some parts of the country suffer from lack of jobs while others suffer from problems of congestion and overcrowding. The fourth objective is to ensure that the fruits of future growth are used in accordance with the needs of a civilised and just society. This is another basic difference between us. The Conservative attitude, which comes out in every speech they make—it came out very clearly in a speech by the right hon. Member for Enfield, West (Mr. Iain Macleod) the other day—is a dislike of social spending and social provision and an almost obsessional devotion to the idea that whatever a person himself does is good and whatever we join together to do for ourselves as a community is bad.
An essential key to these four objectives is an effective policy for productivity, prices and incomes. Here again, there is a basic difference between the two sides, and there is also an obvious basic difference within the Opposition side. Such an effective policy is vital if we are to become sufficiently competitive internationally to achieve our balance of payments objective and our growth target. It is vital also if we are to get rid of the free-for-all system at home under which it is the weakest who always go to the wall.
We have made clear as a Government that we intend to reinforce the activities of those concerned in industry in order to make such a policy effective. We want it to be effective voluntarily. We shall reinforce the voluntary efforts by legislative powers if that is required. Here, I pay tribute to the tremendous steps forward which were taken by both the Trades Union Congress and the Confederation of British Industry a couple of weeks ago in which, for the first time in this country—perhaps hon. Members opposite do not recognise what is happening—the central bodies of both organisations in industry, of the employers and of the unions, themselves took authority and power to begin to operate in this field as is done in other developed Indus-

trial democracies. These were the very first steps ever taken, and it took a great deal of courage on the part of the general council of the T.U.C. and the leaders of the C.B.I. to move in this direction. I pay tribute to it, and I recognise that it was quite a historic day on which those events happened.
The Conservative Party's attitude in this House is quite different from the attitude developing in industry outside. The right hon. Member for Wolverhampton, South-West, who is a member of the Shadow Cabinet, has not only said that it is a patriotic duty for everyone to maximise what he can get personally by way of profits or by way of personal income, but he has denounced the whole policy as "a nonsense, a silly nonsense, a transparent nonsense, and, what is more and worse, a dangerous nonsense."
On the contrary, the manifesto on which the right hon. Gentleman sought election from his constituents said this:
An effective and a fair incomes policy is crucial to the achievement of sustained growth without inflation".
Either hon. and right hon. Members opposite meant it when they said it to the electors, or they did not.
In fact, there is a straightforward piece of duplicity—if one can have a straightforward piece of duplicity—going on here. I put some straight questions to the right hon. Gentleman who is to follow me. Where do the Opposition, for whom he speaks today, stand—on their election manifesto or on the speech of the right hon. Member for Wolverhampton, South-West? Let us assume that the right hon. Gentleman has his reservations, but are they collectively in favour of a fair prices and incomes policy? [Interruption.] Whatever reservations any one Member may have, are they collectively in favour? [An hon. Member: "What about the right hon. Gentleman and his right hon. and hon. Friends collectively?] We are collectively in favour. We are doing it. Hon. Members should ask people outside. Let the right hon. Gentleman answer for his own Front Bench. Can he? We shall see whether he makes a declaration on behalf of the Opposition Front Bench. My guess is that he will not. The country and industrial leaders outside, who are not our supporters, know that the Opposition Front Bench at least is unable to give a decision.
If they stand by their election manifesto on this matter and they believe that the policy is right, do they accept the methods we are using to bring it about? If not, will they tell us what methods they would themselves pursue? We would very much like to hear them.
At the weekend, the right hon. Gentleman issued a statement which purported to show that there was some difference between the Chancellor and myself on the subject. That only shows how important it is to check one's references. If the right hon. Gentleman would read the statement that was put out on 3rd September, the night that I went to Brighton to speak to the General Council of the T.U.C., he will see that I used the very same words that the Chancellor used last weekend at Lanark. If the right hon. Gentleman had even bothered to look at the transcript of what I said at Blackpool to the Labour Party Conference at the end of September, he would have found that I repeated in almost the very same words what the Chancellor said at Lanark and what I had myself said on 3rd September. The fact of the matter is that, in an issue of critical importance to planning, to our growth rate and to our competitive power, the Opposition is more concerned to play the fool than it is to get to grips with the problem.
I return to our balance of payments, which is the first objective of the Plan. I gather that the right hon. Gentleman the Leader of the Opposition is getting a little sensitive about our ever mentioning that there was a balance of payments deficit left to us last year, and, rather like some other countries, he is making strenuous efforts to rewrite the history of the period with certain essential pieces written out. I have no doubt that in the end we shall be blamed for the whole thing. If we had not looked like winning the election a year ago, there would not have been a deficit, he will say. "Oh", says the right hon. and learned Gentleman the Member for the Wirral (Mr. Selwyn Lloyd), "there is something in that". He is the right fellow to talk about it. If I were him I would keep very quiet over there. At the moment, I have another fish in my sights.
The right hon. Gentleman the Leader of the Opposition is so sensitive about it that he has buried the disgraceful lie once. Having buried it, he disposed of it two

weeks later. Having buried it and then disposed of it, he has now dealt with it for a third time. It must be pretty clear by now, even to him, that it is something that refuses to lie down. Let us get it quite clear between us: the £800 million deficit was a statistical fact.

Sir Cyril Osborne: It was £745 million.

Mr. Brown: The hon. Gentleman the Member for Louth is quite right—plus £56 million on the waiver we took on the U.S.
The right hon. Gentleman the Leader of the Opposition was not as blunt and as open as his hon. Friend when he was burying, disposing of and dealing with that disgraceful lie. Some of it was current; and that is quite right. Some of it was stocks; and that is quite right. Some of it was capital; and that is quite right. But the fact remains that, whether it was category one, two or three, it was still all there, and it added up to £800 million. There it was when we came in, however it was divided. That is what we inherited, that is what we had to deal with and what they would have had to deal with if they had got back. They could not go on dodging it. That deficit was equal to the best part of our reserves, and was bound to lead to speculation against the £. With the help of our friends, we have now beaten the speculators, but the need to repay the debts incurred in the process will place a heavy burden on the balance of payments for some years to come. Whether the men who created the mess which led to the borrowing are the right ones to comment is another matter altogether.
Our objective in the Plan is to remove the deficit in the course of next year and then build up over the period ahead of us the surpluses which are needed to repay the loans incurred as a result of the deficit that we inherited. We say in the Plan, for reasons that we set out there, that we shall require a surplus of some £250 million by 1970. To do that, we shall have to look for improvements in all items of our balance of payments, and it does not do the integrity of right hon. Gentlemen opposite very much good to go round attacking each one of the adjustments that we make, when they know very well that if we are going to


get rid of it and turn it into a surplus adjustments of that kind have to be made.
We cannot as a country any longer assume burdens that can only be discharged either by crippling the growth of our own economy or by borrowing from overseas. It does not matter how desirable they may be in themselves in other circumstances; they cannot be undertaken in the present sort of circumstance if we are to get a surplus. Right hon. Gentlemen opposite understand that as well as we do and should be saying it as well. For that reason, the Government are determined to achieve a substantial saving in overseas military expenditure, and that is also a reason why the Plan can only make provision for a small rise on present levels of aid. I thought that the comment which the right hon. Gentleman made the other night about a breach of faith on that account was peculiarly out of place in the situation which he knows to exist. It is also why we must also reduce capital movements on private account. Those may be desirable in other circumstances, but they are not supportable when the result is these very large borrowings in order to sustain them.
The estimates are here in the Plan. If we get all that we shall make a considerable inroad this year and help considerably towards removing the deficit next year. But, on top of that, we also need a very substantial improvement in our balance of trade, and it is here that the improvement in our competitive strength is so vital. One of the factors contributing to the balance of payments difficulties has been the very rapid rise in imports of manufactured goods. We must compete more effectively not only in overseas markets but also on our own doorstep. As the Plan shows, we are setting out in a number of industries to tackle that at the grass roots where that lack of competitiveness here at home is holding us back.
On the other side of the account, as it were, exports will have to increase by 5¼ per cent. a year in volume. That, I believe, is the central challenge of the Plan. The estimates of individual industries' export orders in our industrial inquiry make it quite clear that an increase of that order is feasible. But it will in-

volve a marked improvement on past performance. It is for industry and the Government, to co-operate to obtain that improvement, and I will say a word about that in a moment. We have already introduced a series of new measures which in our view will help to stimulate exports. Those include the export rebate; markedly improved credit insurance facilities, with a considerable lowering of the level at which they take effect as against the past and a considerable lessening of the period over which they are operative; cheaper export credit; the so-called pick-a-back scheme to help small exporters; greater support for the British National Export Council; and a stepping up of the very good work which the Board of Trade does in export promotion activities overseas. Those amount to a very considerable degree of help and, given the limitations on us as a result of our international obligations, a very considerable amount of held indeed.
The hon. Member for Peterborough (Sir Harmar Nicholls) keeps muttering about tax incentives and taxation reductions. We do not accept for any other group in the community that the only thing that justifies them in doing their duty by the community is to lower their taxes. I do not believe that exporters or business men make this claim. On the other hand, the package deal that we have gone into, as I well know, and as the right hon. Gentleman opposite will find out for himself by inquiring, is a very considerable help to them.
Other work is being done. We are doing it in particular industries with the Economic Development Committees, and on the vital question of the movement of export. I accept that it is not merely a matter of getting the production, not merely even of finding where the markets are, not merely even of financing or helping to finance the operation. There is the problem of moving goods quickly enough from the factory to the dock, through the docks and to the customers overseas. There is a very considerable job to be done here. I regard the Economic Development Committee on the Movement of Exports as one of the most valuable bodies established in the last year, and I think that its work can be among the most useful that is done.
This is, of course, in the end the long-term attack, but measures will obviously


take time to be effective, as will the drive, however much we push it on, to speed up the growth of efficiency in British industry. In the meantime one has to deal with the short-term position, and the Plan takes account of this and says what we have done and gives the consequences of what we have had to do. I neither hide what we have done, nor try to avoid recognition of the consequences of it. We have had to take a number of temporary measures to deal with the immediate balance of payments situation, and we have been fully attacked by those who created the need which led to our having to do so.
These measures have been backed up by steps to reduce the pressure on the economy at home, a point to which right hon. Gentlemen opposite never cease to draw attention, nor should they. Nor do we. Those things had to be done. It was all part of an inevitable, inescapable job to deal with the short-term situation. What they do not draw attention to, but what I should like to draw attention to, is that we have gone to great pains not only to correct the balance of payments in the short-term in this way but to do it in such a way that we do not damage the home economy in general. We have taken account of the fact that it is possible to manage our economy in present circumstances in such a way that one can take the steam off where the steam has built up too heavily without at the same time depressing it in other places where there is room for movement.
I want to emphasise the selectivity of the measures that we have taken. They have been selective geographically. Let hon. Members ask anybody in Scotland, the North-East or the Merseyside whether they have been held back while these measures of restriction were put on. The answer is not only that they have not been held back but that just because they were exempted from them at the time when others were being restricted they have had a bonus and gone ahead in the very places where there was room to go ahead. All the figures, evidence and indicators will show right hon. Gentlemen opposite this if they look.
These measures have been selective not only geographically. We have also been

selective industrially and have picked a number of areas and sectors of industry to which the restrictions should not apply. The result is that, whereas we have been holding back on services and other less essential things, we have been going ahead on the science-based and technological things that we needed.
We have also been selective socially. For the first time the essential social services which are at present in operation have gone ahead. [Interruption.] A right hon. Gentleman opposite says that they have not gone ahead as well as they should have done. That is the sort of thing that an Opposition would always say. However, for the first time in a year of difficulty we have kept the social services moving forward and not made them subject to a cut-back.

Sir Edward Boyle: May I put a question to the right hon. Gentleman in view of what he has been saying in the last few minutes? If he is concerned about the science-based industries, why did he choose—he and the Government had a choice—to cut back technical college and university building rather than stop the indiscriminate subsidy on school meals, which affects everybody equally? He talks as though he had no area of choice, but he had a choice and could have been much more selective than he was.

Mr. Brown: We did not cut the total for education. When it came to where the burden should be placed—the right hon. Gentleman is quite right, there was a choice—we took the view that for social purposes and reasons the school meals should not take the cut. It is open to right hon. Gentlemen opposite to say that in their view the school meals service should have been cut. That is a reasonable difference of opinion. But there had to be a cut somewhere, and I repeat that we took the view that for social purposes school meals should not be cut. I am prepared to defend that choice on social grounds anywhere in the country.

Mr. Iremonger: Would the right hon. Gentleman take the same position in regard to the prescription charges under the National Health Service?

Mr. Brown: Yes, I take the same position about prescription charges and would be quite happy to defend my view


on social grounds anywhere in the country. I said earlier that there is a clear difference between both sides in our sense of economic priorities and our sense of social priorities. Let that be understood, and let the public decide between us. I have no doubt where the decision will lie. It is a matter for presentation. I do not hide it at all.
In this situation—this short-term situation with short-term actions—the Plan is even more important as a means of providing the proper perspective for decision-making in industry and ensuring, in particular, that decisions about investment, organisation of industry and the efficient use of manpower are related not to the immediate situation but to the situation likely to prevail by the time those decisions take effect. Only too often in the past industries have changed their decisions because of a temporary situation, so that we found when the temporary situation changed and we got the restrictions taken off there was not enough capacity or investment to deal with the consequences of it. The Plan, by looking ahead further than the immediate situation, enables us to deal with this, and by giving to industries a picture of each other's intentions matched against each other and matched up against a background of Government objectives, it enables them to plan ahead much more effectively.
This brings me to the general question of industry and the Plan. The Plan, as I think everybody now recognises, was drawn up in the closest collaboration with industry, and, of course, it is with industry that the major task of implementing it will rest. We had first, with it, to establish the feasibility of the overall 25 per cent. growth target, and there clearly is no doubt in anybody's mind as a result of that discussion that the target is feasible.
May I just put it in perspective in view of some of the things that I have seen written and heard said about this? To achieve that target requires us to do as much and to increase our output by as much in the six years from the base year 1964 to 1970 as was done in the past seven, and it is no more enormous than that. Clearly, it is feasible. It is not a very exaggerated target to reach for. In our view, this can be done. [Interruption.]

The right hon. and learned Member for Wirral is again interrupting. It is always open to someone to say that one should do still more in six years than he managed to do in seven, but it will do for us if we can at least beat him in that respect.

Mr. Selwyn Lloyd: All I was saying was that what the right hon. Gentleman said was a tribute to what had gone on before.

Mr. Brown: To the extent that it took the Conservative Government one-sixth longer to do it? Well, O.K.

Mr. John Biffen: If the right hon. Gentleman's description of the Plan is correct related to past performance—namely, that he and his colleagues will achieve in six years what was achieved in seven years by my right hon. Friends—does he think on reflection that that justifies his remark in his radio broadcast on 16th September that we have left the stagnant years behind?

Mr. Brown: Yes. I am sure that the hon. Member could understand if he tried. During those seven years there were long periods of stagnation and short periods of insupportable booms. That is how we got to the £800 million deficit last year. A steady expansion over these six years can avoid a deficit, give us a surplus and earn us more than under the previous arrangement.
We had to be able to do two things. First, we had to estimate each industry's exports and the home demand for its products and, therefore, the output required of it. Secondly, we had to assess the resources needed in each industry to reach that output, particularly in manpower and investment.
This has been done with the co-operation of industry, despite incitement not to do so by the right hon. Member for Wolverhampton, South-West, who urged good, decent friends of his own party to revolt and refuse to co-operate with the Government. The extent to which businessmen took no notice of that incitement and continued to co-operate is a measure of the standing of the Conservative Party.

Mr. Terence L. Higgins: rose—

Mr. Brown: I have already given way a number of times.
The Plan, therefore, indicates pretty authoritatively the requirements and the limits of the expansion on which we are now engaged. In the course of identifying these aspects, we came inevitably to situations where contraction of manpower was unavoidable. Among such industries was coal mining.
It is not an unreasonable claim for the Plan, which is not a study from outside, that we have not sought to hide the problems and complications that arise whilst highlighting the opportunities that exist. Among the industries for which a decline seems inevitable is coal mining, where output is expected to show a decline. It seems to us quite clear, after the most careful examination of the prospects in the energy industries, that we should not count on a coal market of more than 170 million to 180 million tons in 1970. In such a situation it is better to say so and discuss the consequences that flow from that for everyone.
Lord Robens claims that the industry can reduce its costs to the point where it can sell more than this, especially in exports. If that is the case, then good luck to him. It would be a first class achievement. But, in the light of all the examination and forecasting that we have been able to make, it seems to us, on present information, that the figure we suggest for 1970 is the right basis on which to go ahead.
Let me make it plain—because we can get a lot of emotion about this—that we are not talking about running the coal industry down because it would be a good thing to do. There are uneconomic pits and pits where the coal is being exhausted. The question is whether one deals with this situation on a carefully planned and phased basis or whether one waits until a crisis arises. We have undertaken to ensure that this is a phased job so that as pits go out of production either new industries come to the area affected or provision is made for the men who can move to do so. Our obligation is not only to the colliers but to their families and their communities, and these we undertake to look after in a phased operation so that hardship does not occur.
I am sure that everyone realises that the Plan is not a once-for-all exercise. It is the first exercise of its scope in this coun-

try and possibly in the democratic world. Our idea is that it should be adjusted and amended and, as it were, rolled forward periodically so that the country always has a five-year plan ahead of it and can take account of the inevitable changes in the assumptions which may turn out not to have been correct. That is just what any major business enterprise has to do. If adjustments have to be made next year and in succeeding years, that does not prove that the original assessments or assumptions were wrong this year. Obviously it would be wrong to tie ourselves rigidly to the National Plan and if, for instance, it turns out that the National Coal Board can profitably reach higher production and sell it, then that will be taken into account in future adjustments.
Industrial growth must involve substantial movements of labour from one industry to another. This does not mean millions of people moving up and down the country, however. Indeed, it does not necessarily mean people moving from one factory to another. Some people may find themselves at the same machines but making something else. Of course, movement from factory to factory will be involved in many cases but I repeat that the changes will not mean millions moving about the country, digging up their roots. But it will require a good deal of mobility.

Sir Kenneth Pickthorn: rose—

Mr. Brown: I cannot give way again.

Sir K. Pickthorn: rose—

Mr. Deputy Speaker (Sir Samuel Storey): Order. If the Minister does not give way the right hon. Member for Carlton (Sir K. Pickthorn) cannot persist.

Mr. Brown: I have been generous in giving way so far.
As I was saying, the National Plan will involve some changes in the way people work and in what they do and certainly such changes are vital and inescapable if we are to speed up economic growth. I appeal to all right hon. and hon. Members, no matter what their interests, to recognise that, if any of us, for any party reason or for any vested interest—and I speak as a trade union official—try to pretend to our people that we can raise


our own standards or improve the country's position in the world without accepting this kind of change, we shall be doing them a great disservice.
The Government are doing all they can to arrange that these changes come as smoothly as possible and with as little hardship as possible. We shall phase new work in as old work phases out. The Redundancy Payments Act is on the Statute Book already. Unemployment benefit related to earnings for those for whom there is a gap will be introduced soon and the Government's and industry's training and re-training activities are being stepped up, helped by the legislation which has also just come into operation.
Steps are being taken to meet the special problems of the coal industry and of other similarly affected industries. Most of the decline in the coal industry will be covered by normal wastage but not all and that is why my right hon. Friend the Minister of Power has already announced that special funds will be provided to assist in the redeployment of manpower from coal mining. He will be announcing more details in a White Paper tomorrow.
The results of our consultations with industry suggest a demand for 400,000 more workers than we shall actually have available in 1970. Even though it takes a few minutes to do so, it may help if I speak to the House about this, because I think that there is some misunderstanding about what it means and what conclusions should be drawn from it. It seems to us reasonable to calculate for reasons which we have set out that by that period half of the gap, 200,000, can be found by the use of the effective regional policies which I was just describing, the bringing into work of people now being wasted in hitherto neglected regions.
That would then leave us with a deficit of 200,000, but it is not an intelligent conclusion that therefore we must have 200,000 more workers. That would assume that there was nothing to be found by way of increased productivity per worker currently employed. Considering the size of our labour force and the sort of ways in which it is now deployed and employed, it must be clear that there is much to be gained from

greater productivity, and the figure of 200,000 against that total labour force is very small.
Therefore, the conclusion to be drawn and driven home is that we need better use of our manpower, particularly in those industries, clearly identified, where on any basis there is now over-manning, wasteful use of people. An increase in productivity per person much more rapidly will also include sharing the benefits of that increased productivity with the worker.
This is one of the most important tasks facing industry, not only important but urgent, and the trade unionist and manager must get down to this problem as urgently as possible and do what is required in his own place to end restrictive practices and the waste of manpower which occurs from keeping people un-usefully employed and to find ways of removing any other problems which hold up willingness to accept that we must have more productivity and better use of manpower.
We can say this in general terms, but we cannot do it from here or from central Government. This is something which industry has to do for itself. I regard the Economic Development Committees as one and perhaps one of the most vital agencies which can help in this and I am asking them all to concentrate on the special needs in their own industries to bring about this aim.
But all this will be done only with co-operation. Men cannot be driven into this and men and women will co-operate only when they feel secure. If they do not feel secure, they inevitably tend to protect themselves, and in that we are all alike. Hence, I regard the stupidity of the threats by the Leader of the Opposition to the trade unionists as being very damaging to the achievement of this longterm aim. If one keeps repeating to people that one is thinking of taking special steps to control them—and those were the words used—people go on the defensive and the co-operation which would otherwise be available is not there.
I now turn to the crucial subject of investment. To achieve the target for expansion which is set out with a slower rate of increase in the labour force, we shall obviously need a rapid rise in industrial investment. The Plan estimates


that investment in manufacturing industry will have to rise by nearly 7 per cent. a year over the whole six-year period and that in construction it will have to double. We have agreed with the Nationalised industries their investment programmes and that will support their share of the target. For them it will have to rise rather more slowly than in the past. This will give us help in raising investment much more rapidly in outside industry.
Investment in distribution and in services will also rise more slowly during this period than in the past. This arises from a number of factors, many of them our own actions in the last year in stopping the wasteful boom in shop and office building in some parts of the country and in some areas. The introduction of the starting date procedure for private building projects of more than £100,000, other than housing and industrial building, will obviously mean that we shall be able to arrange priorities for essential building at a time when the construction industries are under severe pressure.
Here, again, nothing illustrates better that our opponents do not even now understand what planning involves than the hysterical outbursts which we have had from some of them about the starting date procedure. Given that the construction industries have to double their rate of investment and given that they are under pressure, how else can one get the essential work done unless one has some instrument for identifying and holding back inessential work? There is no other way and the industry itself understands that.
But the fundamental problem in investment is to ensure that private industry undertakes the heavy investment needed. One of the most encouraging things—and all the indicators we can consult show this—is that, despite the measures which we have taken in the short term and despite what normally would have followed from that in terms of investment, industrial investment is nevertheless holding up exceedingly well. The way in which programmes are being maintained through what would otherwise be a rather difficult period is most encouraging, especially compared with what happened in any year when our

predecessors felt that they ought to take remedial action.
Of course we recognise and the Plan makes it quite clear that financial factors have great importance as incentives. We frankly recognise that a change may well be needed in this area, too. The Government are at present reviewing the present system of investment allowances to ensure that the system in operation provides the most effective inducement for the investment which British industry needs. For obvious reasons, I cannot go further than that today, but we plainly recognise that there is a need for a very close examination and possibly change.

Sir Harmar Nicholls: The right hon. Gentleman explained about export incentives that he did not want to operate a discrimination in favour on one section of the community. I always understood that the reason why the Government and previous Governments did not introduce an incentive for exports was our commitments under G.A.T.T. Is there any possibility that the right hon. Gentleman will pursue the line he is now describing by opening discussions to see whether we can get G.A.T.T. amended to allow such export incentives?

Mr. Brown: Let us keep the two separate and clear. I spoke earlier about incentives for exports. We have done as much as seems practicable within our international obligations, although, of course, we shall keep under review what else can be done. I am now speaking of inducements for industrial investment at home and indicating our acceptance of the view that change may be needed in this respect, too.
There is one other matter which is very closely linked and that is the subject of correcting the regional imbalance in this country. As with so much else, much of the last 12 months has inevitably consisted of providing the machinery for doing the job. When some people criticise the Plan for not being more specific and not having more policy decisions and not having settled tomorrow's problems as well as this year's, they should take into account that making policy decisions and creating the machinery and turning all that into a plan, all concurrently, provides a full year's work. Next


year, with some of these jobs done, there will be more opportunity for extending.
We have set up the machinery for dealing with regional imbalance. We have set up the planning councils and the planning boards. Between them they will bring central and local government closer together and reduce the chain between policy decisions in Whitehall and their effective carrying out locally. They have also brought in an element of local democratic, or quasi-democratic participation which did not exist before. Hon. Gentlemen may shake their heads, and wish it were something more. I wish that it were something more. I should like to see it grow into something more, particularly the unofficial element, for whom we have now got what we did not have a year ago. We have now got something to work with, something from which to build.
Therefore it is not true to say, as has been said, that we have ignored the regional elements, as I saw in a suggested Amendment which did not reach the Order Paper. It is as equally silly to say that we have ignored that as it is to say that we have ignored the place of incentives in the Plan. We have done neither. On the contrary, we have paid a great deal of attention to both. Later this month I shall be meeting all the regional council chairmen, together with all the national industrial bodies, so that we can hammer things out, in a detailed way, giving effect to the change of direction. This will help us to correct the regional imbalance and get the industrial developments in the right places. As a first step to this, my right hon. Friend the President of the Board of Trade has already announced the addition to the list of development districts of quite a substantial number of places. These areas are exempt from the deferment of public expenditure announced in July, and from the operation of the new controls on private building.
That fact, together with the controls which we have put on office development in London and Birmingham, and the tightening up of the industrial development certificate procedure in regions where labour is scarce, have all contributed to the major change which is already happening, and which we hope will speed up. We are now reviewing the Government's distribution of industry

powers and policies, and intend to make changes to support much more effectively the wider aim of regional development that we have in mind. We are also considering new ideas for differential inducements, which will enable us, in a more positive way, to stimulate movement to the regions that have, so far, been neglected areas of this country. We will announce decisions as soon as possible, but inevitably this kind of exercise takes time. I hope that the House will support the Government in ending the thinking of the past, that the question of regional problems is only a matter of jobs and factories. We have got to look at this regional imbalance on a very much wider basis. It is a question of population movements, of cultural distributions—a whole range of things. It is not merely ambulance work—so long as there happens to be a certain percentage of unemployed in a certain place. We have to get the distribution of all the facilities and all the activities which a reasonably balanced distribution of population would require.
We face a very large increase in population between now and the end of the century. We must begin to plan for this now. We must plan positively if we are to achieve a better regional balance than we have had, and we must plan in the light of the movement of people and the great changes in habits, tastes and requirements, which are already occurring today. We must do this in the light of the present great pressure on land, transport, water, and all the fundamental services which are needed by a population which is growing and regrouping itself, as ours is. For this purpose, even though this Plan goes to 1970, and that is difficult enough, for this purpose we must look well beyond that. The Government have, therefore, already started, following on the successes achieved—and getting it published was a difficulty—a special study of the possible distribution of population up to the year 2000. That would be essential background to the decisions about future new towns, where they should be and the size they should be, about motorways and so on and the long-term decisions that will have to be taken.
It is my ambition, not only that we shall have a continually moving five-year plan, against which we make our year-to-year decisions, but that, as soon as we


can, we shall achieve a wider background within which that Plan makes sense, just as do most of our great industrial complexes today. The regional councils are advising on the long-term potentialities of their regions, on the size of the population they can reasonably accommodate, where it should be situated and how it might be employed, and on the investment that would be required to support it. I hope that by the middle of next year, councils and boards will have done enough work to give us preliminary advice on how their regional resources might be better used, and on the broad policy objectives and strategy of development, towards which the planning in the region should be directed. Central government, whatever it is, can then make much more effective and much better-informed decisions than it has been able to make up to now.
We cannot speak to our people only about getting extra resources, about more effort, about mobility and about all problems. They have also to understand what is in our mind about the distribution and the use of resources. We have to do it this way so that they can decide that the effort is worth while. In the Plan we try to show what we expect to get from this and how to use it. It is important to keep this in our people's minds and also important that they should decide whether our ideas on the social priorities are right, as much as our idea on the economic priorities. As we have said, we expect this effort to produce an extra £8,000 million or so, at 1964 prices by the end of 1970. Clearly the first claim on that must be what is required to put the balance of payments right, and what is required to finance the increasing investment needed. We put that figure in that year at something like £2,000 million. That would leave about £6,000 million to be divided between additional personal spending and public expenditure, including the social sector. I say this quite clearly because of something which I think the right hon. Gentleman the Member for Enfield, West said the other day. We have provided for higher personal spending to take about £4,500 million of that £6,000 million. What is left when we have provided for the balance of payments and the industrial development is for investment.
In that situation how can it be claimed that we are not providing as the right hon. Gentleman claimed, for personal incentives. How much more would he provide? If one provides any more than that what would be left for the social services? People need hospitals and schools and houses and all these other things. These are as much part of one's personal standard of living as the money one actually puts out of one's own pocket. Clearly one of the essential strategic decisions which we, and any Government, would have to take, and which I should like the right hon. Gentleman to deal with when he is speaking, is to strike a balance btween the resources for private consumption and those to be devoted to investment in housing, and the other social services. We are quite willing to be opposed on this, quite happy to be contested on this, if that is the view of the Opposition. But I think that we ought to hear clearly from the right hon. Gentleman, given those figures, how he thinks they should be broken up. Speaking for my hon. Friends and myself, we do not intend, from here on, to have public squalor in an era of private affluence.
The Plan also sets out the result of the Government's review of public expenditure. Again, when we are attacked for not having taken decisions in this Plan, it can only suggest that people are being highly selective in the part of it which they read. We have taken the decisions on public expenditure, and we have decided, and said quite clearly, that the growth of total expenditure over the period in the public sector shall be limited, and will be limited to 4¼ per cent. a year at constant prices. Within this the defence budget is already set to be at least limited to the level of 1964. I saw that the Leader of the Opposition at Bristol was alleged to be having some fun. One of his subjects was roads. Again he clearly still has not read, or his advisers have not, the provisions in the Plan. These are for the expenditure on roads to increase by 41 per cent. over the period and by 70 per cent. on investments in new roads and major improvements.
The investment in public authority housing, houses to rent—and these, for all practical purposes are the only houses


to rent—is to increase by one-third, as is expenditure on education. The expenditure on the health and welfare services is to increase by just under a quarter. The expenditure on benefits and assistance—the largest single programme—is expected to rise by £800 million, or 28 per cent. over that period.
It is open to the Conservatives irresponsibly to promise to increase, double or treble anything that we say we are going to do. That has always been their way. I would not go so far as to say that other Oppositions have not been known to do the same. What is rash is to pretend, as they are doing, first, that we are not providing for large increases in the social services and personal spending—clearly we are—secondly, that they could increase some without cutting others; and, thirdly—the most ridiculous claim of all—that they could increase them all and reduce taxes, unless they have some secret which nobody else has thought of.
I have tried to give the House, probably at greater length than should have been the case, an outline of the main points in the Plan. There is not much point in having a debate on the Plan unless one goes through it rather than merely talks about it. It covers virtually the whole field of the country's economic activities. Even so, one still had to be highly selective. Two threads, however, run through the Plan which I should like to emphasise. Analysis must be the prelude to action. We have been at pains to underline the need for action. If those hon. Members who are interested look at the end of Chapter I they will find the check list of action and the agencies named, whether it be Government or others, from which action has to come. It will be the Government's business to progress chase, as it were, from here on to ensure that the action comes.
There are those who say that we do not go into enough detail about individual services, enterprises and people. If they think out the practical problems which would be involved in that exercise they will realise how useless such criticism is. What we can do is to set the broad framework, break it down into industries and regions—that we have done—and the action, enterprise by enterprise, will

follow. Equally, let us be sensible and realistic about what we can and cannot do in a mixed economy. In the public sector the Plan sets out programmes for nationalised industries' investment, and we are in a position to ensure that their policies are geared to the Plan.
In the private sector, although we have some powers available, some means of influencing, the Government are bound to rely heavily on the co-operation of those concerned. We must not exaggerate what we can do outside that area, although equally we must not minimise the powers and influences now within a modern Government's capacity. It seems to me as though in recent weeks the Opposition have been having difficulty in sorting out what their attitude is. I hope that the right hon. Member for Enfield, West will let us know the results of their thinking when he speaks.
In conclusion, may I put three major questions to the right hon. Gentleman? Is the Conservative Party now converted to the belief that the Government should take the responsibility for preparing and publishing a National Plan? Secondly, does the Conservative Party now agree with the objectives which we have set out? If not, what would its be? Thirdly does the Conservative Party agree with the action which we say needs to be taken? If not, what action which we are taking does it regard as superfluous, or what further action does it propose?
Right hon. and hon. Members opposite may be only Her Majesty's loyal Opposition. They may show every sign of remaining that for a long time. It would still add to the interest of politics if the electorate knew where they stood on those three things. Meanwhile, I am able to ask the House to welcome this Plan as a reasonable basis for claiming that at last Britain is on her way.

5.15 p.m.

Mr. Iain Macleod: The First Secretary started with some good humoured remarks about the debate and about the Motion. It is true that both are unusual. There is a sombre and a more lighthearted side to this matter, and it is as well to fill in the picture as I see it.
The more sombre side—and the First Secretary knows this very well—is that because at the moment Rhodesia hangs


over everything else the Government thought, entirely rightly in my view, that we should add a day to what was originally planned for this week. This is why, at fairly short notice for such an important occasion, the Plan has come to us. My right hon. Friend the Leader of the Opposition has had to leave and would wish me to apologise to the House for doing so. The Prime Minister has been courteous enough to tell me that he, too, has to leave. Of course, I understand that; and if I may say so, I wish him well with all my heart in the next few days.
The more lighthearted matter with which the First Secretary had some fun was the question of whether we should vote on this issue and whether it would be more suitable to have another Motion. We could put forward an Amendment on the lines of that on the Order Paper. We could list the paragraphs in the Plan—with some difficulty—which we welcome and set out a long list of those which we oppose. But we thought it best to criticise and probe now and to reserve our position to return to dissent on a more suitable Motion.
The First Secretary pointed to some differences of opinion within the Conservative Party. I wonder whether, as a lifelong member of the Transport and General Workers' Union, he is wise to bring this subject before the House. I doubt whether at the meeting of the Parliamentary Labour Party this morning he was applauded for what was called in Tribune "the plan that never was", whether he had the agreement entirely of all the mining members of Parliament for what he suggests that he should do, or, indeed, of those concerned with the immigration policy. On this issue, perhaps we can call it quits.
I could draw the First Secretary's attention to a most excellent parable about the beam and the mote which I am sure he will know well, which roughly ends, "Cast out first the Minister of Technology from thine own eye and then wilt thou see more clearly".
One of the matters in the Plan which I welcome was referred to by the right hon. Gentleman in what I am bound to say was an extremely defensive speech, and it is what is said on page 69 about the deficit in 1964. I do not propose to

read paragraphs 4 and 5 on that page into the OFFICIAL REPORT, because the right hon. Gentleman took a long time, although I do not complain of that. I would simply say that the Government are a great deal fairer in their account there of the deficit in 1964 than they have been in anything else we have heard on this or any other day from that Dispatch Box. Also, we can easily welcome what is said about increases in productivity and, perhaps, above all, in investment in recent years.
I want to turn to criticism and to take up what the First Secretary said. He stated that analysis must be the prelude to action. That may be so, provided the analysis is accurate. He said earlier in his speech that he believed that the increases which were suggested were feasible. If the analysis is inaccurate, and if these assumptions are wrong, it is abundantly clear that the Government are building upon sand. Of all the analyses there have been, people will say that one of the most penetrating was made by Mr. Alan Day in the Observer, writing immediately after the publication of the Plan. As the House will know, he is a critic who is by no means unfriendly to the Government. What he pointed out—and on this everything hinges—is that when the Plan argues that
the evidence of the Industrial Inquiry suggests that British industry itself expects a big improvement in our export performance",
one has to go back to the notes that accompanied the questionnaire which was duly completed by industry all over the country. Industrialists were asked to predict their exports in 1970 on the assumption of a 25 per cent. growth in the gross national product. They were, moreover, told that exports would also need to increase much faster than recently. Mr. Alan Day's comment on this is worth reading. He states:
This is an odd way of getting evidence. You think of the answer you want, set a questionnaire which practically forces that answer, and then say that British industry 'expects' the answer you want. All that has really been demonstrated is that British industry employs men who can read and do simple arithmetic.
That is true, and that is the first evidence that I bring before the House: that the analysis to which the First Secretary has referred is fundamentally false. [Interruption.] I am welcoming parts of the Plan. Both the First Secretary and


I engage in semantics. The right hon. Gentleman knows that very well.
The second point is very well put in a letter, which I hope every hon. Member will have read, by Mr. Greatorex in The Times of today's date, pointing out that far from the Plan being, as its very sentence claims, a plan to increase growth—to quote the words of paragraph 1,
This is a plan to provide the basis for greater economic growth"—
the hypothetical increase of 25 per cent., the doubts about which are known to us, compares with a realised increase in the exactly comparable previous period of 25·3 per cent.
Where on earth, therefore, is the increased growth for which the Government are planning? To repeat the point made by my hon. Friend the Member for Oswestry (Mr. Biffen)—if those years are to be called the stagnant years, what sort of planning is this if this represents the ideas that the Government have to put before us? Will the Minister of State be replying to the debate?

The Minister of State, Department of Economic Affairs (Mr. Austen Albu): May I reply to the point now? The years to which Mr. Greatorex refers started with a year when we were fairly well at the bottom of the trade cycle. Therefore, an expansion was not surprising. In addition, the rate of increase in the number of workers in the next five years will be less than half the figure during the period to which Mr. Greatorex refers.

Mr. Macleod: The hon. Gentleman can challenge that later tonight, but I gather that he does not challenge the figures. If that is so, he must accept that the very first sentence of the Plan has already been shown to be wrong.
What I want the Minister of State to do is to take up the question of the status of the Plan. I have read almost everything that the First Secretary has said about this. It is an interesting point, which he talked about again today, and I should like to pursue it further. A plan can be one of three things. It can be either what we can do, what we will do or what we should do.
It is not, of course, what we can do. We all know that if there were a new attitude in industry, on both sides—if restrict-

tive practices were set away, for example, and if we had all the things that everybody in this House wants to see—we could leap forward. We all know this. It is not, therefore, what one can do.
Is it what we will do, in which case it is a forecast, which sometimes has value, or is it really in the right hon. Gentleman's mind that this is what we should do? If that is the case, Government action in sometimes pulling against the facts will increasingly try to make the facts conform to the Plan instead of the other way round. That is exactly the danger.
The First Secretary said that the Plan was just the same as any business would plan. The truth is that it is exactly the reverse of a business plan. A business plan would be precise about next year and, perhaps, the year after and would get increasingly more vague, for obvious reasons, as one goes further ahead. This Plan does exactly the reverse. It says nothing about next year, although that is not particularly difficult to forecast—and a gloomy account it would be—and it gets more and more precise as one gets towards 1970. Therefore, whatever the right hon. Gentleman claims, he cannot claim that in this he is acting as business planning would act.
I therefore put these questions to the Minister of State. When we talk about a rolling plan, does this mean that next year there will be a completely different set of figures which will carry the story through to 1971? If that is so, will there be another questionnaire and will it this time be a good deal more realistic than the last one? Lastly, will the hon. Gentleman say what assumptions he will invite industry to make, because one of the things that was abundantly clear was that there were omissions from the questionnaire, in particular the omission of any guidance about the future with Europe, which seems to me to be an impossibility to leave out from any questionnaire? Are these matters to be made clearer if next year there is to be another questionnaire?
I accept the First Secretary's present intention that this will be a rolling Plan which will get steadily better and better. I am, I think, quoting the words of one of his speeches. We have, however, experience of the drift to compulsion, for example, under the prices and incomes


policy. Often, at the beginning of the prices and incomes policy, the right hon. Gentleman said, "We will try it by voluntary methods". When questioned on television and elsewhere about what he would do if voluntary methods failed, he said, "Let us not think of failure." Now, however, he has to think of failure, does he not, in this regard, as both his own speech and his right hon. Friend the Chancellor of the Exchequer have recently made clear?
The danger, therefore, which I see is that Government action will gradually be brought to bear upon the Plan so that they will try and make this what we should achieve in 1970. If that happens, what the First Secretary is putting before the House is not a plan, but a party political document.
I should like to read to the House from an admirable article, in which I believe in part, called "The Perils of Planning", by Professor Jewkes, in the Three Banks Review. This is how Professor Jewkes begins his article:
If ever the history of economic hallucinations comes to be written, the idea that Governments possess the knowledge and power positively to determine the rate of economic growth through the techniques of central economic planning will be revealed as one of the most widespread, tenacious and harmful of errors.
I agree with that. Quite a number of people go on to say, "Therefore, do not plan". I frankly do not. [An HON. MEMBER: "The right hon. Gentleman used to."] I do not. I was a member of the Government which introduced N.E.D.C. I accept all this. I always have done. What I say is that one must not be hypnotised by the results of one's planning.
The Prime Minister—I know he has had to leave—in winding up an economic debate about four years ago, made a speech which is very relevant to the great debate before the House today, and it really concentrates on the word "choice"—what it should mean. I propose to come back to this in my own speech, because I believe the dangers of not so much the Plan but of what I believe, rightly or wrongly, to be in the Government's mind, are two things. I believe that, first of all, we may inhibit change; and secondly, that we may inhibit choice.
As far as inhibiting change is concerned, let me read this extract from

a speech of the Prime Minister, then economics spokesman for the Opposition. This was in a speech on 7th November, 1961, a speech in which he declared that
Planning without controls is as meaningless as a gearbox without teeth.
Listen to the example he gave:
Let me give an example—fuel policy. Three years ago we called for a national fuel policy, for a figure that the Government would honour for the size of the coal industry. Two hundred million tons was mentioned as a figure for the national indigenous coal industry to work to. This would have meant controlling fuel oil imports, and controlling other things as well, but the Government insisted on what they call freedom of choice …. As a result of their policy we lost 150,000 miners from the industry …."—[OFFICIAL REPORT, 7th November, 1961; Vol. 648, c. 921.]
Let the House reflect on what has happened in these four years. Let it reflect that the Plan is not with an idea of 200 million tons, but of between 170 million to 180 million tons, and so far from trying to get back the 150,000 workers the Prime Minister then said had left the industry, or the 100,000 workers who have left since, the National Plan forecasts a continuing reduction at the rate of about 25,000 a year.
Lord Robens has said,
You can count me out as one of the people who are trying to reach the objectives of the National Plan, as far as my industry is concerned.
I believe that this part of the National Plan is very bad psychology indeed, because the one thing which is quite certainly true is that every single assumption, particularly in the field of fuel policy for many years, has been widely wrong. We all on both sides of the House know this. Over and over again we have been unbelievably wrong—everybody—on this.
Let us take the example of gas, with all its sort of Victorian "Fanny by Gaslight" connection. Everybody thought that there was no future whatever for this. We know better now. We know better from the figures which there are in the papers this morning how well this industry has done—[An HON. MEMBER: "Publicly owned."] Yes. All right. The point I am making is that the present Prime Minister was hopelessly wrong on fuel policy in 1961, as everybody must admit who has listened to the words I have read to the House, and as, indeed, the National Plan shows, and the figures put before the House in 1965 have no


more validity than those put forward by the present Prime Minister in 1961.
On this question of gas we can see—I intend to return to this in another context towards the end of my speech—a clash, which is in the papers this morning, on price. It is not a clash—I have some understanding of how these matters work—between the D.E.A. and the Welsh Gas Board. It is, fundamentally, a clash between the Treasury and the D.E.A. I think there is no doubt whatever about this.
My anxiety on my first point of change is that the mere existence of a plan—and the First Secretary of State used words which I should like to study carefully in HANSARD about the pressures and the effect they bring to nationalised industries to make them conform to the plan—the very existence, therefore, of the Plan in the context of what he said I think proves my first point, that there is a real danger and a real threat to change itself.
I turn to the second point, and I regard it as even more important. As I said—and I believe this is the true contrast between the two sides of the House—I believe that in this sort of planning there is a real threat to choice. I was last night—some people may have seen it—engaged in a discussion on television on an aspect of this. There is a suggestion—the hon. Member knows the teaching profession very well indeed and I am sure he will disagree with what I said on this, but never mind; it is very interesting that a Socialist Minister has put this proposal forward. The suggestion is that we should look at the question of whether student grants should, as they are in many countries, become student loans.
Now there is a great debate going on behind this, and it is far wider than this particular issue, and the issue really is this. Virtually the whole of what we call the Welfare State today springs from an assumption made by Lord Beveridge in 1942—he had no better information in front of him—that the percentage of unemployment after the war would be 8 per cent., and, therefore, the conception came up that it was necessary that the State—and the other side of the House are, in my view, still wedded to this—

should provide a sort of cradle to grave help for everyone.
I want to read to the House, to show how opinion is changing on this, just one very short extract from a Fabian tract called "Freedom in the Welfare State" by Dr. Brian Abel-Smith, who is an expert indeed in this field. This is what he says:
Who is really in a position to adjudicate between the relative social needs of two individuals? Unless there are very strong reasons to the contrary, people should be allowed to make their own choices, and the state's job is, first, to widen the range of choice available, second, to restrain the opportunities for excessive privileges and, third, to warn, counsel and advise, leaving the final decision to the individual.
I agree very much with this, because—

Mrs. Shirley Williams: rose—

Mr. Macleod: I will give way in a moment, but I want to show to the House, before coming on to one particular instance in relation to education, that I believe that the people of this country in the circumstances of today are prepared at least to consider the arguments for a much more radical approach to the question of choice in the social services than they have ever been since Lord Beveridge produced his Report.

Mrs. Shirley Williams: Would not the right hon. Gentleman agree that what Dr. Abel-Smith was putting forward was in the context of choice between the services offered by the State, and not between those offered privately and those offered by the State?

Mr. Macleod: Exactly, but he is putting forward a suggestion in this pamphlet or book from which I was reading. Perhaps I should read the next sentence from "Choice in Welfare" from which I was reading. It says:
Although Dr. Abel Smith's interesting advocacy of more choice within the state services did not meet the possibility that interval competition would make the state services unworkable or that only external competition of growing private services would raise the standards of the state services, it acknowledged the role of consumer choice".
Those who disagree with Dr. Abel-Smith would think that his suggestion would be unworkable; what he is considering is choice within the State services. I am suggesting that we shall get


better State services if we widen choice—[HON. MEMBERS: "Ah."]—certainly—to both private and other provisions, and I am quite certain that this Plan, purely because it predetermines choice over the next few years, or seeks to do so, will in fact inhibit it.
I want to take the one example of education, because I want to speak for as short a time as possible. The right hon. Gentleman talked in some way about the education figures. The Plan provides for an increase of 32 per cent. over this period, but that is the same rate—indeed I think it is slightly less—than that which was provided by the Conservative Government in 1963 in the White Paper, and since then the school leaving age has been raised.
Let us consider the question of educational building under the Plan. One sees that £138 million is put down for 1969–70. Of that—there is an exact breakdown of every penny in it—no less than £99 million is to meet the population growth and new houses, £33 million to meet requirements arising from the raising of the school leaving age, and £6 million for special schools. That adds up precisely to the £138 million set down on page 196 of the Plan. There is not a penny left for replacements and improvements, and there is no money left at all to implement the undertaking which the Secretary of State for Education and Science has given about the primary schools of this country.
More remarkable still—and here again I invite the comments of the Minister of State when he winds up—is what is said about teachers' salaries. There is an increase put down for these years of 18·4 per cent., from £407 million to £483 million. But that increase in expenditure is based solely on the expected rise in the number of teachers employed and makes no provision whatever for any increase in all that period in the level of teachers' salaries. I should like to be corrected if I am wrong in this, but I do not believe that I am. I think that this is accurate. I also think—and I am informed that this is so—that the figure of £407 million is itself out of date because it does not take into account the April, 1965, figures.
The right hon. Gentleman talked about the difference in the two sides of the House. I genuinely believe that there is

a true difference, and as I come to the end of my speech I should like to concentrate on this. It centres for me round this word that I have used on a number of occasions, on the question of choice. The more a Government predetermine, or seek to predetermine, choice in 1970, or at any other time far in the future, the more they will limit the opportunities of choice available to the individual or to the family.
The classic example of this is the policies, as we understand them, of the Minister of Housing and Local Government in relation to the percentage of council house building. This is going against the whole tendency towards homeownership in this country. It is going against the ordinary desires of the people of this country. In a survey of housing which was carried out recently, in answer to the question, "What kind of accommodation would you prefer?", 62 per cent. said owner-occupation including mortgage, 23 per cent. said council houses—[An HON. MEMBER: "If they can get them."]—I agree, if they can get them, and it is getting more difficult every day. To continue the figures of the survey, 9 per cent. said that they wanted a rented house or flat, and 6 per cent. did not know.

Dr. Jeremy Bray: If it is important to increase the freedom of choice, will the right hon. Gentleman say whether he thinks there are more people on council house waiting lists or on estate agents' waiting lists?

Mr. Macleod: I would say that there were more people on council house waiting lists, but this to me is not an argument—it may be to the hon. Gentleman, and it clearly is to the Minister of Housing and Local Government—for decreasing the percentage of homes for owner-occupation in this country. I believe that this is what the people increasingly want, and I do not wish to see this choice inhibited by anything that the Government wish to do.
The right hon. Gentleman issued some challenges to me on this question of planning. I think that in so far as he is planning, he is planning about the wrong things, because what the public want to know, and what Parliament ought to be in a position to find out on behalf of the public, is not how many plastic raincoats


we will have in 1970, or something like that. The public want to know what action the Government are going to take to counteract the import surge when the next reflationary period comes. This is one of the key matters which should be discussed at the present time, and also what kind of planning we need to cope with the stock cycle.
We have made it clear in a number of speeches that the whole Tory approach is going to be very different indeed. Of course the Government are right just as a business is right and an individual is right to do a certain amount of planning. This is inevitable, but to argue that there should be planning or not is at least as irrelevant as arguing about whether one approves of the weather. [An HON. MEMBER: "What about Enoch?"] The simple answer to that question is that my right hon. Friend is the man who produced the two longest-term social plans in this country, the ten-year plan for hospitals, and for local welfare services.
We believe that the Government have the wrong planning machinery. I am glad that the Chancellor of the Exchequer is still here. I know that he has to leave, but perhaps he will wait for a moment. We have two Ministries which are concerned with economic affairs, and they are headed by two very different characters indeed. We have a Minister of long-term "go" and a Minister of short-term "stop". The difference in the position of the Chancellor of the Exchequer now and under a Tory Administration is surely symbolised by the fact that then he was Chairman of N.E.D.C., whereas now he is not even a member of it. The First Secretary plans busily away, and just when he gets to the stage of galley proofs the Chancellor makes nonsense of it all with his July measures. It is ridiculous to say that these were taken into account in time for this Plan to be published. Of course they were not. If they were, let us be told how many of the little "Neddies" met after 27th July and before 5th August. Just when the First Secretary is preparing for a debate in the House, the Chancellor takes a delight in emphasising the failure of the prices and incomes policy, and we realise now that when the Chancellor spoke about fighting a never-ending enemy he was referring,

not to the gnomes of Zurich, but to the First Secretary of State.
My right hon. Friend has made it clear that we believe in the useful work that is done by N.E.D.C. and particularly by the little "Neddies", but that we see no useful purpose served by the Department of Economic Affairs in its present form. We believe that its planning functions should be transferred to the Treasury, and that some of its other functions, particularly in relation to regional development, should go to a reinforced Board of Trade. This has been part of our thinking and it has been made clear on a number of occasions by my right hon. Friend.
The House will have realised that the welcome I give to this Plan is a somewhat frosty one, but I welcome the opportunity of exploring the inadequacy of Socialist machinery and the poverty of Socialist thought. I also welcome the opportunity of showing that many of the assumptions on which the whole Plan is based are themselves basically faulty. But above all I take up the fourth point made by the right hon. Gentleman. It is an excellent thing to have an opportunity of pinpointing the different approaches to choice which exist between the two sides of the House.
Of course there is a difference. The First Secretary of State puts prescriptions in front of, shall we say, the same amount of money being spent for some other purpose—perhaps hospital building or another aspect of the Health Service. It is a point of view that we do not share on this side of the House. In response to a question by my right hon. Friend the Minister said that he was quite prepared, on the order of priorities, to put a cut in the building of technical schools in front of the full provision of school meals. We are not. We think that this is an entirely false order of social priorities.
This, basically, is the issue. It goes beyond the Plan, or any of the social services. It is the question of choice, and by whom that choice should be made. The real difference between the two sides boils down to this: they believe that choice can and should be predetermined by Ministers in Whitehall, and we believe that choice should be made by the individual, in his business and in his home.

5.55 p.m.

Mr. Edmund Dell: In many respects the speech of the right hon. Member for Enfield, West (Mr. Iain Macleod) has been extraordinary. Part of the way through his speech he informed us that he was in favour of planning, but it was only towards the end that we had any suggestion of what form of planning he might be in favour. As I stand here now I am still very uncertain what form of planning he would support. We agree that choice should be maximised, but choice would be maximised most by increasing the rate at which the wealth of this country rises. The criticism of the previous Government was their failure in this respect.
The right hon. Gentleman said that we must plan what to do about the likely surge in imports when the boom gets going. We have had a report by the N.E.D.C. on this precise subject, and on what the Government should do about it. The Government are investigating these questions and will take action. It is quite natural that the right hon. Gentleman should not be able to tell us what he thinks about planning, for one simple reason; we have recently had the Tory policy statement, "Putting Britain Right Ahead", and this document has only one thing to say about planning. It says that planning and preaching are not enough.
We know that preaching is not enough. We had 13 years of preaching from the previous Government. But this is the only reference to planning throughout that document. We can only conclude that the Opposition are still as uncertain as they have ever been about the rôle of planning in our economy. That is a great misfortune. It is unfortunate that we should still be debating, in this Chamber and in the country, not how we should plan—which is the great question that we have to decide—but whether we should plan at all. That question should have been decided.
It is not without significance that this country, which for decades has lagged behind every industrialised country in the world, is the one which is most wedded—as, unfortunately, so many members of the Conservative Opposition are still wedded—to the principle of laissez faire. We can well understand their disappointment in planning. They made a pretty

feeble attempt at planning, to which the right hon. Gentleman referred, towards the end of their period in office. What did they end up with? They ended up with a deficit of £750 million on balance of payments. We can understand their disappointment. But the suggestions that they are now putting forward as substitutes for planning are themselves grossly inadequate to the nature of the problem which we now face.
They have three sovereign remedies: price mechanisms, competition and tax incentives. These will provide the answers to our problems. I do not deny that all these proposals have their place in planning, but it has been shown again and again that by themselves and without the backing of planned Government intervention in the economy, these planning mechanisms—because they can be used as planning mechanisms—will fail to solve our economic problems.

Mr. George Y. Mackie: Will the hon. Gentleman tell us whether these mechanisms—tax incentives and competition—have failed to solve this problem in every other Western country?

Mr. Dell: Taken alone they have failed, but in other Western countries they have been associated with determined Government intervention, in order to make sure that the rate of economic progress was as high as possible, given the capacity of the country's industry. Any investigation that one makes in detail of the economic situation in Western countries shows the large part which Government intervention has played in economic success in all those countries. Our great failure over the years has been a continual reluctance by the Government to intervene.
I am glad to see that that reluctance is being thrown aside by the present Government. They have a job to do to promote and expand our industry. They have to change the structure, the psychology and the philosophy of our industry. The change will be completed rapidly enough only if the Government do intervene. For example, we need more industrial mergers. It is significant that 50 per cent. of German exports are provided by 100 leading German firms. A similar situation exists in Japan. In this country it takes twice that many firms


to provide 50 per cent. of our exports. If we had stronger industrial units the whole problem of promoting exports would be greatly eased. The Government must take steps to ensure that industrial mergers are promoted.
We need a different attitude in industry—which, again, the Government can help to promote—to the problem of promoting exports. But the whole problem of expanding exports is not just a question of prices. There is great danger—and the Government may have fallen into the error themselves from time to time—in continually emphasising the aspect of prices in promoting exports. I was glad to see, the other day, in the issue of 29th October of British Industry, a reference to the fall in the importance of prices as a factor limiting ability to win export orders.
We also need a different attitude to investment—a longer-term attitude, and one which looks beyond any current slump, if there is one, to the boom which is to come, so that we do not run out of capacity to provide exports and to satisfy home demand as soon as we enter into quite a minor boom. For this reason the Government are entirely right to search for ways of promoting investment by tax incentives. To do all this the Government have to plan and then intervene. They have to take up a self-confident, interventionist stance. They must use their purchasing power and their enormous economic influence within the country to ensure that the structure and purpose of industry are changed. They must root out of the Government machine itself the remaining elements of this laissez faire attitude to industry.
I should like to refer to one very small incident which took place in the House on 2nd June. I asked my right hon. Friend the Secretary of State for Defence what preference his Department was giving, in making purchases, to suppliers with good export records. The answer was "None". Although he said that the matter could be investigated, but he did not seem to offer me very much hope. The hon. Member for Devon, North (Mr. Thorpe) congratulated the Secretary of State on the grounds that his reply was:
the expression of the purest free trade doctrine …"—[OFFICIAL REPORT, 2nd June, 1965; Vol. 713, c. 1702.]

I believe that it was and that is precisely what was wrong with it.
The N.E.D.C. Report on Imported Manufactures, which is a most important document, shows no reluctance by the people engaged in its production to see the Government intervening with its purchasing power and enormous economic influence to see that necessary changes in industry are made.
I believe that the Plan has great psychological importance. It is a pledge to industry and to trade unions that the Government will ensure that the rate of economic progress is sustained. What the country requires from the Government is a guarantee of steady economic progress. Without such a guarantee, industry will not invest enough and trade unions will not be encouraged to co-operate in rooting out restrictive practices and avoiding waste of manpower.
An example of the attitude of industry is given in the N.E.D.C. Report, which refers to the fact that the chemical industry, particularly, complained that their investment programmes had been held back by their fear that the Government would not sustain a sufficient rate of economic progress. I do not believe that that was a sufficient justification for failure in investment by the chemical industry, although one can understand their attitude. It is essential that the Government should ensure that this guarantee is given to industry.
The guarantee can be given to industry and trade unions only if the Government are able to ensure that the guarantee will be maintained. It can be given only if people believe that the Government are capable of fulfilling it. Therefore, one particular point in my right hon. Friend's speech which is of the utmost importance is his reference to achieving something which we have not had since the war—a stable balance of payments.
I do not believe that it will be possible to have a stable balance of payments while we are expected to bear the level of overseas Government expenditure which we have sustained over recent years. One of the most important facets of the plan is its revelation that the economy rests on a knife edge, in the sense that our balance of payments situation over the next five years is far from


guaranteed. Therefore, the ability of the Government to ensure sustained economic progress is also far from guaranteed.
The plan itself states—we should take warning from this—that the underlying balance of payments situation of this country has been weakening over the last decade. It gives four reasons for this. It refers first of all to the rapidly growing deficit on the Government's net expenditure abroad. It refers to the long-term capital outflow, to the slow growth of exports and to rising imports. These are the four reasons for what it describes as the underlying weakening in this country's balance of payments.
The Government have made certain optimistic estimates about these four factors. I do not say that they are optimistic because I believe that the Plan's production target is optimistic—as the First Secretary indicated, the production target in itself is not very exciting—but they are optimistic when one considers the balance of payments. The previous seven years to which he referred ended with the enormous deficit which we had last year. I say that these assuptions about these four factors—imports, exports, the flow of private capital and Government overseas expenditure—are optimistic from the point of view of the balance of payments.
Of these factors, the Government have done most about long-term capital outflow. The decisions which the Government have taken in this respect are absolutely correct. One thinks of the Corporation Tax and the influence which it will have on long-term capital outflow, of the direct controls on capital exports and of the revival of the Capital Issues Committee's interest in investments in the sterling area. Inflow, on the other hand, is not in our control, yet the Government have felt able—I hope that they are right—to estimate that the net deficit on capital outflow in 1964 of £228 million will have been changed by 1970 to a surplus, a net inflow of £75 million.
The assumptions about imports are also fairly optimistic, taking into account the fact that we may be compelled at the end of next year to get rid of the import surcharge, which has had a significant effect on imports during this year. The export target is also optimistic. It is more opti-

mistic than the best assumption of the National Institute for Economic and Social Research in their August report.
I see no reason why what I have described as these optimistic assumptions should not be fulfilled, given the fact that the Government intend to intervene in the economy to ensure that they are fulfilled. I have no doubt that they can be fulfilled, but we must understand, in judging the sorts of burdens which this country can be expected to bear, that they have yet to be achieved, and that they are, in themselves, optimistic.
Therefore, the Government must look very seriously at the final factor in this, which is their own overseas expenditure. The two main items here are aid and overseas military expenditure. I regret that the Government are finding it necessary to maintain aid only at its current level. It is a pity that throughout the world at the moment everyone is retrenching on aid to developing countries. If anything could be done to ensure that aid to developing countries by this and other nations was increased, that would be of international benefit.
However, this will be impossible within the existing Plan if we are to continue at anything like the current rate of overseas military expenditure. The Government say that overseas military expenditure, expenditure across the exchanges, will be severely cut. I welcome that, but the Government must understand that unless it is cut, the Plan cannot be achieved. Unless it is cut, we shall continually be running into balance of payments problems. If that happens we shall not be able to give industry the sorts of guarantees which are required if they are to overcome their own investment problems and invest sufficiently to raise the rate of economic development.
The Government must regard this as an absolute commitment to cut overseas military expenditure by the kind of figures—or larger ones—which are mentioned in the Plan. Without that, the Plan will not be fulfilled. This is, therefore, the Government's first responsibility. This is a good Plan, but to fulfil it the Government must make a far more realistic assessment then, I suspect, they have done of this country's economic capacity and its capacity to undertake military burdens in the world. If they do that, we have in the


Plan an adequate pledge to the people of this country that this Government are really determined to press ahead with economic development.

6.9 p.m.

Mr. R. W. Elliott: I am very pleased indeed to follow in the debate the hon. Member for Birkenhead (Mr. Dell). It is probably appropriate we should be called to speak in this sequence in the debate. He represents Merseyside, an area which, in the general economic pattern, has known its problems in the past few years, and I come from Tyneside, and I think that he will agree with me that Tyneside, too, has known its problems economically in the past few years, particularly in terms of employment and industrial development.
The hon. Member said a number of things with which I broadly agree. He would like to see steps to encourage industrial mergers. I agree with that up to a point. If industrial mergers come by the application of natural economic forces, then let us have them. He also said that he would like to see longer-term investment encouraged by tax incentives. I very much agree with him, and I hope that he will press the Government to do something about this, particularly after their action on Corporation Tax earlier this year and its devaluing effect on the all-important investment allowances which have done so much to assist areas such as Merseyside and Tyneside to help themselves in the past few years of Conservative Government.
He talked about the psychological effect of the Plan and suggested that this could be good only if the nation as a whole had a belief in the Government being able to fulfil the Plan. Again I very much agree with him, but I have the gravest doubts whether the nation as a whole has a belief that the Government can fulfil this Plan.
He said that the economy of the country rests on a knife edge. I very much agree with that. I believe that the phrase originally was Lord Butler's when he was a Member of the House, and if I remember rightly Lord Butler suggested that the economy of the country rested on a razor edge, as indeed it does. But the hon. Member was right to remind us that the whole basis of our national economic well-being depends on our effecting a balance

between that which we import and that which we export. It is all very well to have a plan, such as this Plan, which in some respects we admire but which is full of pious platitudes and long-term thinking. As my right hon. Friend said, it has greater emphasis on 1970 than on 1966. But we must constantly have before our eyes and minds the fact that our economy rests on a knife or razor edge.
The Plan in its broad aims is one with which we all agree for, naturally enough, we all desire a 25 per cent. increase in national output. That is bound to be a common aim. The means of achieving it are set out in broad and somewhat vague terms in the Plan. I should like to examine some of the suggestions in the context, particularly, of regional planning. Having had some experience of representation of a region which has had to organise itself very much in terms of adjusting itself to new industries and the contraction of old, I feel that I might make in consequence a reasonably useful contribution to the debate.
I suggest that in its regional suggestions the Plan takes a great deal of its general appreciation of regional development from the Hailsham Report on the North-East. This, I believe, was a good and sound Report which faced facts and which established certain criteria. Those responsible for the production of the Plan have been sensible enough to set their regional aims on those criteria. As the Plan suggests in its regional development section, there cannot be national well-being until we are socially and industrially one nation. Generally, the regional structure is right. The greatest danger to the well-being of the country or any part of it is over-parochialism, and county boundaries as we have known them in the past must not represent the barriers to co-operation which they have certainly represented in the past.
But, by the same token, we must never become too regional conscious. I believe that at certain times the rest of the country has become just a little weary of hearing of the problem areas and that the over-emphasis and over-stating of some of our problems has been inclined to give the wrong impression. The North-East has at times appeared to some of my colleagues on both sides of the House to be


an area fraught with fantastic difficulties and situated towards the North Pole. I think that the hon. Member for Birkenhead will agree that at times the gloom expressed about Merseyside has given the same impression.
In fact, this country is a very small place. While we have our problems in those areas, the over-emphasis of them has at times been a hindrance rather than a help. The North-East Development Council, which was set up some years ago and which has received general support from all parties and all organisations industrially and otherwise in our area, has seen as one of its biggest tasks and problems the overcoming of the bad propaganda which the north-east of England particularly seems to attract. This suggestion that we were, as one hon. Member once wrongly and inaccurately stated in the House, a deserted plain, an area which was dying, was very bad indeed for the region, and very bad in the national interest.
The North-East Development Council did a great deal to correct this, and hon. Members on both sides of the House also played their part in correcting it. We were very sorry indeed that a recent B.B.C. documentary entitled "Dan's Castle" set us rather badly back here and gave an appallingly bad and inaccurate impression of the north-east of England. It is very easy for the B.B.C. or anyone else to go to any area and find appalling slums. It is very easy indeed for the B.B.C. to find areas which are in a bad state of repair.
It was particularly unkind of that documentary to illustrate a piece of our north-eastern coastline—which on the whole is among the best in the country—and to describe a section of it as resembling Buchenwald-by-the-Sea. That piece of coastline was Redcar-by-Sea. which I have always thought a rather nice place. I hope that the landladies of Redcar, in particular, were as annoyed about this documentary as I was. With modern transport for individuals and freight, Merseyside and Tyneside are not far away from anywhere. It is therefore sound national planning to encourage the fullest use of the whole country and sensible to try to steer industries and individuals into those areas.
Here one comes to the point of real disagreement between the two sides of

the House on planning. In time, the North-East, Merseyside, Clydeside and Northern Ireland would have got their share of industry and individuals by the natural application of economic forces. If the South-East and the Birmingham area had become hopelessly and uncomfortably overcrowded, with their sources of land, labour, housing accommodation and the like completely exhausted, of course we should have had a natural overspill to those areas which, by the very contraction of their old industries, needed new forms of employment, but we had not time to wait for this, and therefore we had to find what I would call the half-way house on planning. We call it encouragement of industry, and we have done a great deal to encourage industry to these areas which need it. Over 300 new firms have gone to my own area in the North-East in recent years to assist us in our enormous battle to provide new employment and new means of production in the place of the contracting coal and shipbuilding industries.
The Hailsham Plan set up in Newcastle, the natural capital of the North-East, a miniature Whitehall. We realise that we should not expect a document produced by the Labour Party to pay much tribute to what the Conservative Party did. But while the Plan claims that planning boards have been established in the regions where development is needed—and I agree that that is so—it is only fair that I should point out that the setting up of regional boards in such areas as my own was accomplished before the last Government left office.
The Hailsham Plan also established the growth area conception and designated new towns. It is, therefore, good to see on page 85 of the Government's Plan that regional policies will not be concerned with bolstering up small areas which have no economic future but with developing those parts of each region where there is real growth potential.
I hope I may be forgiven if I recall an all-night sitting which we had towards the end of the last Parliament. On a Monday night in July, 1964, we debated the future of the north-east of England. On that occasion I was sitting on the benches opposite and listened to one Labour hon. Member after another from the North-East demanding new industry


at the pithead of the constituency he happened to be representing. It is good to realise that the Hailsham thinking on the growth area conception, which is essential in regional development, has been accepted by the Labour Party.
It is essential to have development and to encourage it where developers are reasonably willing to develop. It is common sense to develop where transport facilities will be easy and good and not on the pattern of the old coal mining industry. Let us in the period immediately ahead have area thinking and planning. But what of area co-operation? The First Secretary talked of the essential co-operation which we must have if we are to have a successful national plan. I agree with that, but I must return, by way of criticism, to the subject of the north-east of England. I do not believe, having claimed that the regional boards were our work, that the appointment of, as against the election, of regional councils, is right. There is grave danger here to the basic democratic principle on which we have governed our country and regions for many years. We criticise the appointment of regional councils.
If it is argued that the advice of local business and professional men is needed, I suggest that the best of such men are already serving in local government. If they are not, they should be and we should find out why they are not. I fear the departure from the democratic principle embodied in the appointment, as against the election, of regional councils. If it is argued that these regional councils have yet to prove themselves, I naturally accept that and I can, in thinking of the First Secretary's appeal for co-operation, assure him that co-operation on regional development will be forthcoming from my hon. Friends and I and those who support us in the regions—providing we see a suggestion of co-operation from the right hon. Gentleman and the Government.
In discussing the National Plan we have heard a lot, before today's debate, about our thinking having been restricted within areas and that it has been disjointed. I believe that in the process of moving forward we must face some of the problems which are peculiar not

only to the regions but to the country as a whole.
On Tyneside we know that, in regard to our problems of future employment and prosperity, a real problem exists with regard to skill. It is remarkably easy to be wise after the event and to have hindsight when one considers the problem of skill. When I listen to to or read the speeches of industrial leaders—be they employers or trade union officials—on this subject I find that much play is made of the amount that should have been done in retraining. In my experience I suggest that it would have been remarkably difficult, even a few years ago, to fill more than the 700-odd places in the three Government training centres in the north-east of England. I say this because the problem of skill is a new one for the regions and although it may be that we should have done a little more about technical education, it was not all that easy to establish the means of retraining miners, shipyard workers and so on until these people were in need of retraining. However, I add my appeal to those already made for the maximum co-operation—from trade unions and employers alike—in solving the enormous problem of training for skill, especially in the regions and particularly in the North-East.
We still have in the north-east of England about 90,000 people employed in the coalmining industry. In the Press this week the First Secretary was reported to have disagreed with Lord Robens in the suggestion of the Chairman of the National Coal Board that the price of coal should be increased. Some hon. Members opposite—I think that I am the only one on this side of the House at the moment—who attended a meeting at the Team Valley Trading Estate, Headquarters of the National Coal Board, Northern Region, in January of this year will recall that while there was no political comment one way or the other, the officials of the N.C.B. in that region pointed out that the first Labour Budget, with its increased National Insurance charges and increased fuel tax, had placed an enormous extra burden on the Board in that region.
The officials suggested to us that although they were doing their best with the closing of non-economic pits and the sensible contraction of the industry, that


the Budget represented an additional burden which it would be heavy indeed to carry. I recall that when I asked if that would mean an increase in the price of coal in due course, I was quite firmly shouted down, by the Labour hon. Members present.
We can have a National Plan. We can have a Plan which talks of long-term aims and of what the 'seventies will be like. We can have a Plan which speaks of jam tomorrow, but the all-important thing on which everything depends is a sound economy—the control of inflation; the success of a wages and incomes policy, if one wishes to call it that. It is, therefore, the basic responsibility of the Government of the day to control inflation and control the economy so that, on that controlled economy, can we have a successful and prosperous future.

Several Hon. Members: rose—

Mr. Speaker: Order. Many hon. Members wish to take part in the debate. I appeal to those who are called to be fair to those who are waiting to be called and to try to keep their speeches short. This is no reflection on the speech to which we have just listened.

6.30 p.m.

Mrs. Shirley Williams: It was after the publication of the Devlin Report on the docks that we first heard a new phrase—the "wreckers" of the economy. Anybody who listens to hon. Members opposite would have the right to call them the "knockers" of the economy. The right hon. Member for Enfield, West (Mr. Iain Macleod) revealed in three utterances an acute ambivalence towards planning, amounting almost to schizophrenia. Hon. and right hon. Members opposite are very like people who put their toes in the water but refuse to learn to swim. The right hon. Member for Enfield, West is a sophisticated economic thinker and knows far better than these three remarks implied. He deliberately confused productivity with production. He knows the difference as well as anybody in the House.
The right hon. Gentleman referred to the inability of my right hon. Friend to be able to plan effectively if what he did was to reveal rational targets to industry at the industrial inquiry, but surely the

whole purpose of planning is to set before industry the national need to ascertain how far it is capable of meeting it. I would be surprised if the right hon. Gentleman is still so primitive in his economic thinking that he believes with Adam Smith that the summation of a set of individual targets amounts to what the nation requires. Surely the true solution is to find the middle path between the willingness of firms to meet the national targets and the requirements of the nation if the National Plan is to be achieved. The right hon. Member for Enfield, West referred dramatically to what he called the drift to compulsion, but surely he would agree that there is more than one type of drift to compulsion.
If this country within the next five years fails to achieve the export target, fails to reduce the increase in imports and to increase production and productivity in the manner laid down in the National Plan we shall equally surely drift to compulsion, and that compulsion will be the compulsion of disinflation, of unemployment, of cuts in the social services, which amount to a complete repudiation of choice for a large number of people in our population.
After those general remarks I turn to the National Plan itself. I believe that one of the great merits of the Plan is that it has set up a network of consultation and of confrontation of opinion between both public and private industry. In doing this it enables industries to know beforehand, far more clearly than they have done in the past, the requirements they will be asked to fulfil. This is perhaps one of the great achievements of democratic or indicative planning. It enables firms to work in the clear light of day and not in the fog of obscurity about one another's intentions. It was because of this that the Confederation of British Industries and the T.U.C. hailed the plan when they first heard of it. It was because of the advance in thinking which it represented in this respect.
My first general point on the Plan is that I hope very much that what was hinted at by my right hon. Friend the First Secretary will shortly be achieved, and that is that the economic plan will be paralleled by a physical or geographical plan which will give some indication of


how far the pattern of population distribution in the country can be associated with the economic requirements of the Plan. This seems to me to be necessary for the completion of the total picture of planning in this country.
Secondly, I should like to make one general criticism of the Plan and that is that perhaps its title is a little too precise. It is very much a national plan, but I should like to have seen a little more about the effect of movements of tariffs in E.F.T.A. and the E.E.C. on future of planning in this country, and a little more based on supposition of what might happen to our economy in the next five years should arrangements in Europe change greatly, as well they might.
The first of the specific points I should like to make about the Plan is crucial and central and that is how far one can implement a plan of this kind, having said that we want to see the plan carried out because we believe it essential for the health of the economy. The Government might look again and in more detail—and I do not want to take the speech of my hon. Friend the Member for Buckingham (Mr. Maxwell) from him—at Government purchasing. The total of public procurement, local government, national Government and nationalised industry together, amounts to approximately 40 per cent. of all purchasing in this country. We might possibly consider something which has been done in France and that is to attach to major public contracts a condition that their taking-up must be dependent upon the willingness of the firm to try as far as possible to satisfy the target laid down for the industry in the whole Plan. This is one method of trying to encourage firms to satisfy the terms of the National Plan.
I very much agree with what has been said in the debate about the need to look again at tax incentives for investment. We recognise, as does the Chancellor, that the Corporation Tax again opens up the question of investment incentives. I hope that we can look at them and make them much more selective, in view of the fact that here, I believe, the Government can again ensure that as far as possible the targets of the Plan are carried out. I am not at all sure that, at least in the next few years, we should not look again at the creation of credit and again take

a leaf out of the French planning book. In France the Treasury can guarantee a loan to a firm which is endeavouring to carry out or which has succeeded in carrying out its responsibilities under the National Plan. The Government should look again at the possibility of this kind of incentive—which is not compulsion. We should also bear in mind the possibility of using at some later stage, if we need to, selective import controls, bearing in mind the possibility of protection on the competitiveness of a firm. I believe that the 9·1 per cent. increase in manufactured imports estimated in the National Plan is perilously high.
The Government deserve a good deal of credit for the effort which they have made to extend Government training centres but I agree with the hon. Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott) that 8,000 places, that is a rate of about 16,000 places a year, is still inadequate.
According to statistics in the Plan dealing with two declining industries something like 112,000 men will be coming out of the inland transport industry in the five-year period and about 67,000 people out of textiles. People coming out of these declining industries particularly require the training facilities which the Government can provide—and which a firm in a declining industry will not provide—if they are to go back into the mainstream of employment. I draw particular attention to the 67,000 in the textile industry, because that industry is typically one where so many of the workers are women, and the activity rate in the North-West is the highest of all regions in the country. The woman worker is far more likely to leave the market if she does not have facilities for retraining and refresher courses than is the breadwinner of the household.
I should like the Government to look again at what they are suggesting for overseas aid, not perhaps in this first year when they are trying to balance payments but at least in the later years. The reason is simple. This country does a larger proportion of its trade with developing countries than do most industrialised countries. If there is a general move towards retrenchment then in the long run this country will suffer more than any other industrial country. It


is for us to take the lead in getting away from this form of retrenchment.
As for the social services, we have made it clear on this side of the House that we believe very strongly in comprehensive social services and in improving them. I am a little bothered by the fact that the Plan suggests if anything a slightly slower recruitment for health and education. The figure for the Health Service alone is lower than it is for the gross national product. Those who have had to do with hospitals well know that, despite the "brilliant" plan of the right hon. Member for Wolverhampton, South-West (Mr. Powell), there is still a great gap to be filled.
If we can get this Plan looked at year by year and if the First Secretary would consider bringing forward an indication of the way in which the Plan is rolling forward and an annual report on progress we as Members will be able to keep a close eye on it, to offer suggestions and advice and, most important, to retain the primacy of the House of Commons over what is now a very large field of Government responsibility and activity.

6.40 p.m.

Mr. Paul Dean: I shall follow the hon. Lady the Member for Hitchin (Mrs. Shirley Williams) in referring to manpower and the activity rate, but with particular reference to regional plans in the context of the National Plan. The National Plan itself and the speech of the First Secretary of State today emphasised the immense contribution which balanced regional development can make in filling the manpower gap which the National Plan exposes. On page 11 of the Plan we read:
An essential condition for the fulfillment of the Plan is the fuller use of manpower in the less prosperous regions of the country".
In the same context, I note another sentence in the National Plan where, dealing with regional plans and referring specifically to the South-West, it is said that the South-West has one of the lowest activity rates in the country and a large potential reserve of labour. Thus, we have in the South-West, as the National Plan admits, a region which can make a substantial contribution in meeting the key problem of shortage of manpower which the National Plan brings out.
The First Secretary told us that the restrictive measures which have been taken were selective geographically, industrially and socially. For the South-West, they have been brutally selective, because the whole area, with one or two small exceptions, has been affected by the restrictive measures.
Along with other regions which fall at neither extreme, the South-West faces particular problems today. We are not like the prosperous South-East or the Midlands with their problems of congestion. Equally we have not the problems at the other extreme faced by the North-East and Scotland. There is a real danger that the problems of regions such as the South-West which fall into neither of those categories will to some extent be neglected, particularly in present conditions.
I shall give one or two illustrations of what I mean to show that we are as yet by no means convinced that the Government mean business when they talk in the National Plan of the need to fill the manpower gap. My first example concerns the road programme. This is practically the first Government for many years to cut the road programme. We are feeling the effect particularly in the South-West. It is an example of national planning which makes it exceedingly difficult for regional planning in the South-West to operate effectively. The Economic Survey of the South-West published last year, a report commissioned by the local authorities in the South-West and carried out by a firm of consultants, with the support of the Government, has this to say about our communications:
The need for good communications is of paramount importance to the Region in view of the distances from main centres of population and industry".
I am glad to see the Joint Under-Secretary of State present because he has been in the South-West quite recently. He has been along our roads and he knows how true that statement is. It will be a hollow sham to talk about the development of the South-West unless our road building programme is accelerated. Very soon, the motorway system, the M4 and the M5, will link the north of the region to both London and the Midlands. Again the Severn Bridge will link the north of the region to South Wales. But beyond that, farther to the south and the south-west,


there will be jam, delay and frustration on the roads. When we have this linking of the north of the region around Bristol to the motorway system, the problems of the rest of the peninsula will be even greater unless our road programmes in that part are stepped up.
How many new industries will be persuaded to set up in the south-west of the peninsula, when the road communications over to South Wales or towards London and the Midlands are infinitely better? How many industries which are already there will be persuaded to stay or expand unless road communications are better? I shall give just one of many examples which have come to my notice recently. One of the biggest shoe manufacturers in the country, Clarkes, has its base in Somerset, and it has nearly 20 factories in the South-West. It has expanded a great deal in recent years and has many plans for expansion in the future, but it has stated that the biggest restricting factor on its expansion plans in the South-West will be communications. There is a major firm, one making a large contribution to the economic development of the South-West, which says nevertheless that its future plans must be in doubt unless the road programme is substantially improved. We cannot hope to bring in new firms or encourage existing firms to expand in the south-west peninsula unless the prospects for improved road communications are there.
Here is another example of the way that recent policy has had a disturbing effect and is working against the very prospects and possibilities for development which the National Plan admits that the South-West has. I refer to the development of ports and, in particular, to the Portbury docks scheme. This is another example of delay and indecision having a serious effect and damping the enthusiasm of those people on the regional Economic Planning Council who are doing their utmost to solve the problems which we face.
The National Ports Council has reported on this major project. When I say "major", I mean major not only for the South-West but for the whole country. The Economic Planning Council also has made its report on the project, yet

we still await a decision from the Government on whether the scheme is to go forward or not. The longer we wait, the more difficult it is for industry, exporters and shipbuilders to make their plans for the future, and the more difficult it is for the Somerset County Council, as planning authority, to plan the development of the surrounding area which is growing very rapidly. There is also uncertainty and anxiety in the minds of thousands of people who live in the vicinity and who, naturally, want to know how they will be affected.
Those are just two of many examples I could give of the way in which developments and policies in recent months have been making the overcoming of problems in the South-West extremely difficult, making it exceedingly difficult for those who are working on regional plans to produce plans which will be effective and which can be put into operation before the problems I have mentioned get out of hand.
I want to quote just once more from the Economic Survey of the South-West. Dealing with the past decade, it uses these sombre words:
Without the holiday industry and the introduction of a handful of new manufacturing firms during the past decade a large part of the Region could be considered a depressed area. The symptoms of depression would not be as stark as those in the great industrial areas of the North but the effects would be as serious.
It says that about the past decade. It says this about the prospects for the future:
There is every indication … that the Region will enjoy less success in the next decade unless there are considerable changes in policy centrally and considerably greater exertions regionally.
We have no intention of allowing a situation to develop where we have less success in the future. We are willing and eager to put out greater exertions in the regions. We are not the home of the merchant adventurers for nothing. We are determined that our famous part of England shall continue to combine beauty and pleasure with economic prosperity. But what we ask for is a square deal from the Government and a fair chance to make our full contribution to national prosperity. At the moment, we feel that we are not getting a square deal and that the new economic machinery which has been set up in the region is not having a


proper chance to operate. Unless these regional policies can get off the ground effectively the National Plan is not going to be worth the paper that it is written on.

6.53 p.m.

Mr. Ness Edwards: Mr. Speaker, I shall keep in mind your injunction to hon. Members to keep their speeches as short as possible, without at the same time deleting matters which we think important and which ought to be brought out.
I want to express my general appreciation of the work that my right hon. Friend has done in producing the National Plan, because there has been far too little appreciation both in the country and in the House of his work. I was a bit surprised that the right hon. Member for Enfield, West (Mr. Iain Macleod) complained about the short notice of the debate. The Plan has been out for some time, it has had widespread discussion throughout the Press and a very great deal has been done by television to publicise it. I was rather surprised at the ambiguity with which he approached the general principle of planning. One would have welcomed from him that warmth about the Plan that he showed to the Prime Minister when he talked about his difficulties in Rhodesia and which he himself showed when he was in charge of the Colonies in the previous Government. He talked about the Plan in principle, but not in particular. His theme was, "I like planning." It reminds me of the old tag: "You love me, but why do you kick me downstairs?" That seems to be the ambiguous attitude that he showed here this evening. I am wondering whether he felt that, just as on another occasion, he could not carry the party behind him in the clear thinking which he has about the situation.
Having said that, I want to say that the publication of the National Plan gives us for the first time an overall picture of the economy, and it is only by getting that picture that we can discover the reasons for stop-go, for the booms and stagnant periods, for the financial crises and all the things which have troubled the country ever since the early twenties. Here was a very good diagnosis of the general situation and, on top of that, then to go to the employers of labour and to the trade unions and get

them to look at the national problem as a whole, subordinating their own narrower interests to the national interests, was a great achievement and the first time that it has ever been done in the country. One would have expected a far greater appreciation of that achievement.
The object of the Plan has been to get expansion without inflation and to get an economy that permits a steady and continuous improvement in our standards of living. That is the job which my right hon. Friend has sought to do, and to make the necessary preparations to keep our country's place in the world to which it is entitled. It will mean a very considerable redeployment of our nation's manpower, and that is going to be a big job in itself. In producing the document, in producing the subsequent document and another document that is to come tomorrow, my right hon. Friend is approaching the national problems in a way that ought to have been tackled long ago, and the only way that is going to enable our country to recover the position it had in the past and to which it is entitled. My right hon. Friend's Department, at which there has been so much fun poked, the big N.E.D.C. the little N.E.D.C's and, in particular, the new regional economic structures and the Prices and Incomes Board all form the machinery which will give effect to the lessons and the needs that emerge from the diagnosis. In a sense, it can be the essence of a design for a new Britain and, if we are to get a new Britain, that is the sort of machinery that is necessary to work out the lines, the dispositions and the terms of the new economy and the redeployment of manpower.
It is very easy for the economists and planners to issue White Papers, to change the figures in one column, transfer them to another column and say that a particular industry must be expanded and that another industry must be contracted, that there is an expected market for a particular class of goods and therefore that we must match the manpower to it. That is easily done on paper, but, after all, we are dealing with the lives of people. Every man who has to change his job, every family which has to take up its roots, and every child who has to move to new surroundings and a new school in a strange neighbourhood, represents a little crisis. That is what


we have to consider, because that is the sort of thing that is probably going to happen to hundreds and thousands of our people before this national conception of our economy becomes a reality.
We all know that the change has to take place. We all know that it is inevitable. All of us support it in principle. We agree that we have to cut out the dead wood in our economy if we are to move forward. We agree that we should change the pattern of our industry, modernise and automise, but when it affects our constituencies, industries and interests—even when it affects the House of Commons—it is an entirely different story—change for everybody else but not for us. Consequently, we must face up to it with courage and imagination.
This becomes a more serious problem perhaps in mining than in any other industry. I would tell the right hon. Member for Enfield, West that planning for an extractive industry is an entirely different problem from planning for industry in general. In the mining industry one is fighting nature, geology, pressures and a climate of opinion. Ten men killed today can mean a loss of 100 men in manpower tomorrow. These are the difficulties in mining.
Like every other miners' Member of Parliament, I am apprehensive about the situation in the mining industry, but it is a situation that would have arisen without a Plan or without a prophecy. That is one of the things that we have to face. This is our only indigenous supply of fuel, and if we go wrong in our calculations about fuel and power, it means that all the prognostications in the National Plan collapse. I see many right hon. and hon. Gentlemen in the House who remember our experience of a shortage of coal in 1947 when the economy of the country was brought almost to a standstill. We remember that crisis. Consequently, any mistake made here is likely to have consequences far greater than have perhaps been expected.
For some years now we have had a commitment to a target of 200 million tons of coal a year. I remind the right hon. Member for Enfield, West that his target in 1956 was 250 million tons, but the Conservative Government were 50 million tons out. With the best will in the world, when fixing a target for

the mining industry one may be wrong both as to the size of the market and as to the amount that can be produced. I want to be fair about this. It is a difficult exercise. If we have a hard winter we shall burn 10 million tons more coal than if we have a mild one. [An HON. MEMBER: "Nonsense."] It is not nonsense; it is a fact. We have to start every winter with at least 17 million tons of coal in stock if we are to be sure of going through the winter without facing a shortage.
No one knows where the figure of 200 million tons came from. It has been a magic figure. It has also been a static one. It was fixed some five years ago, and it has remained as though no technological change had occurred in the meantime. But technology alone has created a situation in which we ought to look at that figure again. I can only assume that the 200 million tons a year was fixed as a figure to carry the overheads with which the industry was so unjustly burdened. When one looks at the situation of the industry one can say that, in view of the size of the overheads, many of which ought never to have been carried by the industry—American coal, the cost of subsidence, pits which were not worth 2d. and were, in fact, liabilities—and the need to wipe out all these things, we made very many bad bargains when we nationalised the industry. All those things had to be wiped out and the industry still had to carry a burden.
When the target was reduced from 250 million tons, in respect of which a capital investment programme had been got under way, to 200 million tons, that was the time to have conducted a capital reconstruction. Because the Conservative Party did not relieve the mining industry of the burden which the Government had imposed upon it, the industry has had to carry it ever since. The result is that because of the burden of the overheads many pits have been made uneconomic although if they had been carrying a normal burden they would have been profitable units of the industry.
The Government have now reduced the burden by £400 million. In addition they have relieved the industry of the obligation to pay £10 million to the special obsolescent fund fixed by the Conservative Party in the previous


Government's White Paper on the financial responsibility of nationalised industries. Besides that, a 5 per cent. preference has been given in respect of Government buildings and Government-subsidised buildings. On top of that, the mining industry has been given a guaranteed market—not big enough in my view—in both the gas industry and the electricity industry. When I hear some of my old mining colleagues say that the Government have not done anything for the mining industry I am aghast. Never in the history of this Parliament or the history of British industry has so much been done for a single industry as the present Government have done for the mining industry. It is about time that was said.
Now in their White Paper on fuel policy the Government have said that they expect the market for coal in the coming year to be not 200 million tons but between 170 million and 180 million tons. [An HON. MEMBER: "It is not a target."] It is not a target, but even if it were, it would be to the credit of the mining industry if it could exceed it. This is an assessment of a trend. The publication of this figure has created a climate of opinion in every coalfield the like of which I have not seen since the 'thirties. It is quite inexplicable. A mood of pessimism has spread throughout the coalfields. A thousand men a week—I am sorry, Mr. Speaker, to take so long, but I must make these points—are leaving our mines. We have the race now between mechanisation and automisation and the manpower drift.
I do not think that the exclamation by Lord Robens that a schoolboy could do the job is to his credit. It was a schoolboy's ejaculation, a bit of petulence. Lord Robens has done a grand job with the industry. He brought to it the qualities it required at the time. If every other industry had achieved the same increase in productivity we should be in an entirely different position.
The manpower drift in the coal industry is now such that 50,000 men a year are leaving it. It is not only the bad pits that they are leaving. The problem is as severe in the profitable areas—Yorkshire, Leicestershire and Nottinghamshire. There, the rate of loss is similar to the rate in South Wales. In my constituency there are 1,600 vacancies in the pits.

Some pits are in danger of closing because they cannot get enough men and there are others where the drift is such that the fear of shutting down is causing yet more men to leave, even where in reality there is security.
The Government have been pretty ham-handed in handling this situation. The slogan going round the coalfields is, "Halt the pit closures". It reflects a fear of the future. I believe that in South Wales there is work for all able bodied miners, if they are redeployed, and that it is better to redeploy South Wales miners within South Wales than expect them to go to the Midlands. In the redeployment in the coalfields, let us have more generosity and vision than in the past. Treat the miner we want to move from one district to another in South Wales in exactly the same way as the civil servant is treated. Let him have a resettlement grant and removal costs. See that he gets a new house and that he settles in; see that his child gets a proper chance at school in the new area.
These are things which must be done and I doubt whether it was wise to publish the White Paper on Fuel Policy without at the same time publishing the White Paper, due out tomorrow, dealing with the social consequences of the redeployment of manpower. To issue them separately was foolish in the extreme. Tomorrow we shall see what steps are being taken to give effect to something announced a week or so ago.
Whatever we do, we have to keep the viability of our valleys. There is room in South Wales for all ablebodied men in the mining industry but there is also the problem of the partially disabled men. They constitute a higher proportion of the mining industry than of any other. We must make special provision for them and I hope that able bodied men will not use the establishment of new factories to desert the jobs they can do, thereby preventing men who are partially disabled from working in these factories.
I am sorry that I have taken so much time, but this problem is vital to the country. It is vital to the men in the industry and vital to each of the coal fields—Scotland, Durham and South Wales—where the greatest changes are to take place. We know that, if the


job is done slowly, still more pits will die. That is the tragedy. The slower the job of redeployment, in the last analysis the more pits will shut. The quicker the job is done the fewer the pits that will shut.
I am concerned not so much with keeping the pits open as I am about the livelihood of the people who may have to be displaced. There is fear of the future and unless the White Paper tomorrow takes away that fear from the people in the mining industry we shall not get the redeployment which may be necessary in the economic situation of the country.

7.16 p.m.

Mr. Terence L. Higgins: I have a number of specific points to make, so I hope that the right hon. Member for Caerphilly (Mr. Ness Edwards) will excuse me if I do not follow him in detail about the coal industry. I am surprised to find, however, that he did not take into account the protection the industry has enjoyed in the shape of the fuel oil duty and restrictions on imports of American coal.
Normally, I would welcome any measure which encouraged the business community to employ better forward planning techniques, but I am unable completely to welcome this National Plan. We should be clear that it is in no way a national plan. It is a party political document. Its political implications are extremely serious, more particularly regarding consumer choice, already touched upon by my right hon. Friend the Member for Enfield, West (Mr. Iain MacLeod). The First Secretary of State stressed that he had had talks with industry and the unions but made no mention of talks with the consumer associations. We are very concerned that the consumer interest as well as the business and union interests should be considered. It is significant that, in an open letter to the First Secretary of State, published in the latest issue of Which?, it is clear that the National Plan is not a "best buy".
The other points I wish to make are more technical but deserve consideration as well. The First Secretary of State suggested that the National Plan provided a perspective for industry on which it could base its own plans. It is impor-

tant to bring out the fact that the document is not a forecast. It is a target. I is not a forecast drawn up by the business community. The right hon. Gentleman went to the business community and asked it to assume a rate of growth of 25 per cent. and to work out the implications for particular industries. A 25 per cent. growth in output is a nice round figure, like 3 per cent. for mortgages.
But contrary to what the right hon. Gentleman suggested today the business community is in no way committed to the feasibility of the figures it has provided to him. His assertion that they are is dangerous because it will sap the confidence of the business community that is needed in this kind of exercise. He has no evidence, as far as I know, for saying that the business community believes his target rate and the figures based on it are feasible. If he had wanted to know this, he should simply have added at the end of his questionnaire, "Do you think the assumed rate of growth is feasible?" He did not do so and I believe that his remarks today were invalid. We need both a national target plan and also a document saying what the business community expects to happen. On this basis the figures based on the target of 25 per cent. and the existing plans of firms could easily be amalgamated.
One could then examine the difference between the two documents and get an idea of where the bottlenecks in the economy would arise. We would then have an analysis on which to construct suitable policies to direct us towards a target of growth. However, because it is based on the assumptions which I have mentioned, the National Plan does not fulfil the purpose of a constructive document. It is a completely political document and should be assessed as such.
The precise dates to which the Plan applies have not been made clear. I was very glad to hear the First Secretary say that he proposed to have a rolling plan in future. I hope that we shall be told tonight when the next issue of the Plan is to be. I hope that we will have a Plan next year which shows us what the prospects will be for the following five years, because it is very important that, like industry, the Government should reappraise their plans each year. Unless they do, the Plan cannot possibly fulfil


the function which the First Secretary maintains that it should fulfil—providing basic assumptions on which industry itself can make its own investment decisions. I hope that tonight we shall be given a specific date when the next issue is to be produced. The present document certainly made complete revision.
It should also be made quite clear that figures must be given for each individual year. There is no reason at all why we should only have specific figures for this year and specific figures for 1970, but nothing in between. The questionnaire in the National Plan contains a remarkable entry which asks for figures for 1963, 1964, 1965, 1966, 1967—"later years if appropriate"—and 1970. I would have thought that it would have been a great deal easier to insert 1968 and 1969; we would then have had specific figures drawn up by industry for the whole period of the Plan.
I believe the First Secretary was reluctant to do that, because it would enable one to see precisely what the implications were as we went along and how far the Government's policies were succeeding in their objectives. I believe that that is why we have not had specific figures for each year in the National Plan. I hope that they will be given in any future document.
The First Secretary is quite wrong to assert that allowance has been made in the document for the recent measures taken by the Chancellor of the Exchequer. It is perfectly clear to anyone who has read through the document that no adequate allowance has been made for those measures, and yet it is more than probable that they have pushed the whole Plan back by one year. We must have a closer assessment of what has been done to the Plan by the Government's own short-term policy.
I shall follow your suggestion, Mr. Speaker, that we should be as brief as possible, but I want to make two more technical points. The right hon. Member for Caerphilly suggested that the Plan gave us an overall picture. In fact, the most remarkable omission from the Plan is any attempt to provide overall figures. There is no overall input/output table. I hope that tonight we will have an assurance from the Government that an input/output table will be placed

before the House of Commons. Unless it is, we must be forced to the conclusion that the figures do not add up. If they do, there is no reason why an input/output table, showing the consistency of the figures and reconciling the set of figures for one industry with the sets for all other industries should not be drawn up.
Finally, we must have a breakdown of the global figures which are given for output per head. Such global averages are meaningless and we need to know—and there is no reason why industry should not provide the figures—how much of this expected increase, which follows from the assumption made by the First Secretary, is expected to come from the removal of restrictive trade practices, how much from people working harder, how much from greater capital investment, how much from economies of scale resulting from an increase in the size of the market and how much from technological change. Only if we have that kind of breakdown can we examine the validity of the figures which are now put forward in the National Plan with very little evidence and very little detailed analysis to support them.
Many questions about the document need to be asked. I hope that we shall have the assurances for which I have asked. The overall danger of the Plan is that we are given a target figure for a rate of growth which is set by the First Secretary without industry being asked if it is feasible. We may find that the time comes when the rate of growth is rather less optimistic than the First Secretary has assumed and we shall then find him saying that private industry is failing the country, although, in fact, it has not committed itself to the feasibility of the targets he has suggested. We shall then find the public sector being maintained at the level planned and the whole of the shortfall coming from the private sector's shore. The Plan would become an exercise whereby the First Secretary and his colleagues could seek to justify an expansion of the public sector at the expense of the private sector.
I return to the point made earlier—we must have the Plan rolling forward and we must have figures for each year, so that if the public sector is taking too large a percentage, because the target is


not achieved, we have a basis for revising the Plan as it goes along. But long-term planning is meaningless unless it is put in its short-term context from time to time.

7.27 p.m.

Mr. Ted Leadbitter: The hon. Member for Worthing (Mr. Higgins) referred to the National Plan as a party political document. He said that it was not a plan, but he asked for another next year. He said that there were no overall figures in it, and yet he wanted something which his right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) said was not possible to obtain. The hon. Member for Somerset, North (Mr. Dean) spoke of the problems of the South-West and gave the regional reasons why more planning was needed. However, the hon. Member for Worthing does not agree with planning. Earlier today the Leader of the Opposition confirmed by gesture what he had said at Bristol—that his opinion of the Plan was very poor.
Certainly it has had a mixed reception in the Press and on television and by some journalists. For some it is a plan, while for others it is an analysis of the British economy. For others it is the object of scorn. The right hon. Member for Wolverhampton, South-West (Mr. Powell) has described it as fatuous and the Leader of the Opposition took upon himself an exercise of derision without reading it. However, whatever is said about it in some quarters, it has captured the imagination of the nation.
Industry has played its part in the making of the Plan, and the N.E.D.C. has already indicated that the Council of the "Little Neddies" accepts the need to overcome the obstacles which are revealed in the Plan and which must be overcome for the growth of the economy. The Plan points the way. It outlines the task before the nation. As a document it turns its back on more than a decade of wandering wasted opportunity and of indifference to the nation's needs. It brings our people face to face with the facts of life.
Whatever else might be said, it has a greater chance of injecting purpose and drive into the national economy, than any other measure that has been introduced

by the party opposite during the years when it controlled the affairs of this country. It would be unrealistic to presume that it will fulfil its objectives in every respect. In the course of time much will be altered. Events will have their modifying influences. Technical developments may well be deviated from their expected course; manpower considerations may not remain constant; the bold steps of its authors may well be confounded by social considerations. This does not mean that, as a plan, it falls short of our requirements today. We must have somewhere to start to meet the twin tasks of paying our way and avoiding any repetition of the mess which we inherited.
This debate is to welcome the Plan. We must not be unmindful of the reasons for it—a visible balance deficit between exports and imports, between the years 1951 and 1962, of £2,870 million, which represents, in my opinion, a decade of trading which we could not afford to repeat. A real rise in our standards of living could not be obtained on that kind of performance. Our real influence in world affairs, with that kind of performance, was bound to wane. I have referred to the mess which we inherited. The Opposition may well have something to say about that. Already the Leader of the Opposition has referred to it as a myth. The Times in November of last year did not refer to it as a myth. This is what it said on 26th November, 1964, in referring to a loan which had been raised by this Government:
Its immediate origin is a legacy of the last Government. This must be said because unless memories are refreshed, a Conservative myth will grow up that Sir Alec Douglas-Home and Mr. Maudling left behind them a sound, well-based economy which Labour promptly ruined … This is not so. The latest crisis was building up before the election. Action was delayed … The return of the Conservatives to power would solve nothing. They had thirteen years to produce the answer and did not do so.
This was not brilliant foresight on the part of The Times; it was a confession of a knowledge of how the Conservative mind works. The inheritance was not a myth. It was one of the conditions which made this National Plan imperative. There is another aspect of the problem, and that is the question of the two nations, which was debated in this House


month after month, year after year, before the Labour Party gained the confidence of this country and the right to govern. We all knew the arguments about the two nations.
I need only refer to my own constituency, The Hartlepools, which became a byword for depression and unemployment. We resented it and I was sorry about it. Here I refer to the earlier comments of the hon. Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott), about the descriptions that had been applied to the area in general. I agree with him. I and my constituents resented the kind of reputation which they gained nationally, not only because we became a byword for depression and unemployment but because we resented the first causes of that reputation, which was the indifference which had been applied to the problems of the area for so many years. The fortitude, the patience and the drive of my constituents won through in the end and that was the general picture of the area—a kind of picture which can be repeated in other areas, in the designated parts of this country, which could be brought before the nation's mind.
If this Plan has its shortcomings it is still welcome to an area such as mine. There is one major matter which concerns me and that is the question of the present lack of skills and the present employment problem in my area. We are naturally concerned about the deployment of men, their training and their opportunities. I understand that in the National Plan there is some reference to the 800,000 workers needed during the course of the period laid down in the Plan, and how a large part of this need will be met. It is in this category that a proportion is expected to come from the provision of jobs in the areas of high unemployment. I would urge a special study here, for this provision demands a radical change in our housing needs, from a constructional point of view, from a policy of letting point of view and from a financing viewpoint. Jobs available in an area without houses are of little use to a family man who has to move.
On page 111 of the National Plan it is stated that the aim is to build 500,000 houses. Might I make a point that, while numbers are good in themselves, other

matters, such as deployment of the houses, distribution of them and other matters, deserve a larger part of our thinking. The manpower part of the Plan, which strikes me most particularly as being of the highest importance, is not even in this category of moving a man from one area due to the provision of jobs in a place of high unemployment. It is something to do with a section of our population, an age range. They are the people who are now over 40 years of age. This is a matter of immediate concern to many men who are in this category, and who are denied participation in the new industrial activity which is taking place around them. In the northern region, nearly 60 per cent. of the men out of work are over 40. Far too many have been out of work for long periods. These men are too large in number for anyone to claim that they are getting a fair share of employment opportunities. In many cases prejudice stands in their way. In many cases occupational and superannuational considerations lock the door for them. Other considerations involve a lack of skill.
There is a more odious objection in the way of employing this important category of men. If they suffer from a slight disability, a cold or a cough, a spot of chestiness or a pallid complexion an employer can turn them away. This problem can become intensified in particular parts of the region. In The Hartlepools we have a serious problem concerning people over 40 which is causing educationists, industrial advisers and officials of the council much concern.
In answer to a Question of mine earlier this week the Minister of Labour told me that in The Hartlepools area at 12th July, 1965,
the latest date for which information is available, 489 men aged 40 years and over were registered as wholly unemployed … Employment exchanges are always concerned to bring to the attention of unemployed men the opportunities for training in the Government training centres in the region. During the 12 months ended 28th October, 1965, there were 15 applications for training from men in The Hartlepools over 40 years of age, of which 4 were accepted, 3 rejected, 5 withdrawn and 3 are under consideration.—[OFFICIAL REPORT, 1st November, 1965; Vol. 718, c. 111–12.]
I do not believe that over half the men out of work in The Hartlepools can be considered to be largely unemployable or untrainable. The fact that they are over


40 raises special problems. More research is needed to discover how best to reduce the incidence of unemployment among men in this category. No doubt new approaches must be made to training needs and there must be a better understanding of the domestic problems connected with labour mobility.
For some of us the Plan may not go far enough. But time and changing circumstances will add to it. Where weaknesses are found, or expected rates of progress are not achieved, remedial steps can be taken. We can see from the Plan that age range problems and others will be upon us at a very early date.
I am satisfied that we have before us a monumental work which is a great credit to the Department of Economic Affairs. It is the first sign to put this nation on the right road to prosperity.

7.44 p.m.

Mr. George Y. Mackie: May I start by saluting those Members who are here to listen to the debate? I do not know whether there are any, but, if so, I salute them. May I compliment the Members who are here to make a speech on their attentive demeanour throughout the debate? It is a great compliment to their patience. I am the only Liberal Member to be called, so I am afraid that I must cover a good deal of ground, and I will try to do so fairly quickly.
I welcome the Plan. In our statement we said that we welcomed the publication of the Plan. We did not mean to carp in the way that a number of hon. Members on this side of the House have been carping. My criticisms will be many. There is little point in praising the Government for what they have done. It is far better to criticise them for what they have left undone.
The First Secretary has shown great enthusiasm and ability to step in where angels fear to tread. The way in which he has got many businessmen and trade unions working together is a distinct advance. He is to be congratulated on this, and on the creation of the Department of Economic Affairs. It may not be perfect. Indeed, right hon. Members of the Tory Party may have better plans. They may criticise the Department for fighting with

the Treasury, if indeed it does, which I have no doubt about. However, the creation of a Department which can fight with the Treasury is a tremendous step forward.
All of us in our political experience have known constituency party treasurers who are absolutely meticulous about telling us where the last ha'penny has gone. They criticise the amount spent on postage and are unable to raise a single bawbee to fill the party coffers. It may be unkind to the Treasury to say this, but there is a slight residue of the feeling in the Treasury that its job is to stop spending, whereas it has enormous responsibilities for the financial health of the country. For this alone the creation of the Department of Economic Affairs must be welcomed.
The Plan is a first step—a fact which the First Secretary frequently admits—and as such does a great deal of useful work. It is very useful to say that there is pie in the sky if we try, which is more or less what the Plan says. It is useful to tell people that £8,000 million can be available to them by 1970 if enough effort is made and that it will be split between the repayment of debt and public and private spending. This is useful, and it is right and proper.
The check list of action required which appears in the Plan is very useful, particularly for political opponents of the Government, in that it says that defence expenditure overseas will be reduced. This will be quoted at the Government in future. It is an excellent target for the Government to try to reach. Useful things are said about studies being made to increase exports and to establish export groups. Better and easier credit is to be given. I could go through many major aims which the Plan details in the check list which are excellent in themselves. As I have said, I should like on behalf of my party to welcome this essay in planning.
To hear some opponents of the Government speak one would think that we still believed in the pure milk of Adam Smith. But many things which Adam Smith said are still true. We are now rich enough to try, and indeed we know how, to avoid many of the evils which unrestricted competition and enterprise brought in its train. To this extent, planning is an excellent thing.

Sir E. Boyle: I hope that the hon. Gentleman, as a Liberal and a Scottish Member, will deliver Adam Smith from the many unfair things said about him. I have no reason to think that Adam Smith would disagree with the sentiment which the hon. Gentleman has just expressed.

Mr. Mackie: I am sure of that.
A rate of growth of 3·8 per cent. is not very ambitious. It is only half that achieved in West Germany and little more than 1 per cent. more than the Tories achieved from 1950 to 1962 when it was about 2·6 per cent. In the same period, West Germany had a percentage of 7·2, Italy 6·3 and France 4·4. Therefore, we do not regard the target as particularly ambitious. We regard it, however, as an advance over the Tory régime, although now that the Tories have a rough-rider in the saddle of their sluggish bronco, their sights are being advanced and some Liberal measures are coming forward under the guise of new Tory policy.
We must, however, look at some of the premises which the Government and the First Secretary have put forward. The right hon. Gentleman said that the basic requirement to get on with the Plan was that the balance of payments position should be put right and confidence in the £ established, and then we could go ahead. The right hon. Gentleman made, I thought, some dangerous statements in suggesting that there was great confidence that this had now been achieved.
Certainly, the Government deserve credit for the way in which they have manœuvred to protect the £ and the way they have got the bankers to lend them money. They are now able to attack the speculators and the £ is strong, and this has been well done. Although it has been well done, however, their position is precisely the same as that of a man with an overdraft. When his creditors hear about it, they are willing to renew supplies.
It is important to realise that the major factors which contributed to the enormous deficit under the Tories and to the position during the last year are still present. I do not believe that the hardheaded gnomes of Zurich or anybody else look specifically at the confidence of the Treasury Bench when assessing the

£. They look not only at the short-term prospects, but at the long-term outlook and at the things that really matter. They look at exports, labour relations, delivery dates and the general vigour of the economy and the co-operation therein. They will be looking also at the forward planning of the Government.
The most glaring omission from the Plan is the lack of a commitment to Europe. It is quite unrealistic to en-deavour to forecast an increase in exports if we ignore the biggest growing market right on our doorstep. Exports to Common Market countries fell by 4 per cent. during the first half of this year compared with a rise of between 11 and 19 per cent. a year during the years 1959 to 1963. This, I think, was because the reduction in tariffs inside the Common Market is now beginning to bite. Because of this, we must consider ways of increasing our exports to this enormous market.
I do not think that we can look to the Commonwealth, as the Government seem inclined to do, for relief. Although Commonwealth countries have, during the last five years, increased their purchases from abroad by about £700 million, the British share has fallen by about £60 million. Both these figures illustrate the foolishness of trying to stay out of Europe. I know of all the difficulties. I am well aware of the trouble within the Common Market, but a declaration of intent at this stage that we intend to join the Common Market as soon as we can would greatly strengthen the hands of the Five and would, I think, make General de Gaulle much more reasonable in his attitude. I do not see how we can plan for a great increase in production without looking for the markets in which the increased production can be sold.
I welcome, of course, the Government's regional intentions. One of the best things in planning is that economic forces are no longer allowed to act as a magnet to a given area, destroying the life of that area and, at the same time, destroying the life of the area which it empties. The Government's regional proposals are right and proper and their intentions, I think, are good. I should like to see a good deal more bite in some of their proposals. I was glad to hear the First Secretary say that they were examining


new incentives—as I hope they are—for people to move to the development areas. When I see the Government introducing a payroll tax which is variable in different areas, I will begin to think that we are getting some real biting measures which can enforce the Government's good intentions in regional development.
A great deal of thought needs to be given to the establishment of regional boards and councils for planning, and we need to look at our existing examples. The Scottish Liberal Party—indeed, the whole of the British Liberal Party—is in favour of devolution of power. We have long said that there should be a parliament in Scotland to run Scotland's own affairs. I do not say this because I dislike the English or have any great resentment against them for Flodden and things past. I have always regarded them essentially as nice people. They have no regard for anybody's interests but their own, but they do not mean to be nasty about it. The fact is that devolution is a practical policy.
In the provision of jobs and in many other directions, Northern Ireland affords a practical example which we could follow. It is of great interest that since 1948 the number of jobs in Scotland has risen by about 80,000. I am not sure of the exact figure, but I believe that that is fairly accurate. In Northern Ireland, 60,000 new jobs have been created in the last 15 years or so. These are the figures that we were given the other day. Thus, a country of 1½ million people has, by its own efforts, and because its Government are anxious about their own people and understand the problem, created in Northern Ireland nearly as many jobs as have been created during the same period in Scotland, a country four times the size. This is a practical example.
In case anyone doubts what I say, let me quote from the National Institute Economic Review, which states:
The existence of a separate Government in Northern Ireland has resulted in more generous inducements to increase employment than has been applied to depressed areas in Great Britain.
I do not need to read that review to know that Northern Ireland has produced a very efficient agricultural administrator. By their organisation of the seed trade, the Northern Irish have taken

away a large part of Scotland's seed trade.
The lesson which must be learnt by the Government is that it is no good appointing civil servants centrally to boards and expecting to get a new feeling of responsibility in an area or a country. It is necessary to devolve Parliament as well as trying to spread economic wealth and manufacturing capacity. Without devolution of power, I do not think that any regional policy can succeed, because only the people of an area can create the sort of climate which is needed to make a place not only prosperous but fit for people to live in and to make them proud to live in it.
I should like now to come to one of the weaknesses of the economic plan. Several Members opposite have spoken scathingly of competition and incentive, and indeed, they no doubt have a right to be scathing of them by themselves if nothing else is taken into consideration, but this country is at the moment having it too easy for its home industry, and this is made worse by the fact that we have still the 10 per cent. surcharge. What the Government should be doing is thinking of ways to reduce tariffs to make economic competition, to make it a little harder for businessmen to make profits, and a little easier for them to keep them, if they want a competitive economy. Adam Smith would doubtless agree, and I will paraphrase him, that if we cannot compete at home with imports, then it is quite obvious that we are not going to compete abroad, and industry cannot compete at home with massive tariffs added to by 10 per cent., and therefore it is highly unlikely to compete abroad.
The Labour Government might learn a lesson from what is happening in agriculture. Agriculture is an industry which is doing rather well. I am very grateful to the National Plan for telling the nation authoritatively what the N.F.U. has been saying for some time—that it is making a big saving in imports and is making a big contribution to the balance of payments. The Government put it at £250 million in the last 10 years. They put in some nice figures, too, about productivity, which has risen 6 per cent. in the last four years. This is, I think, a very valuable service to my own industry, but it is also a blessing to the nation, because farming has been squeezed and


this has meant that farmers have raised their production.
I am getting 1d. less for milk than I got 10 years ago and I am getting less for potatoes and less for grain and my labour is costing me double. This applies to everyone else, of course, but farming has been squeezed. Under the Tory Government plan to squeeze the farmers the farmers produced more to keep up their standards of living. I would suggest that it is high time that this Government applied this lesson to the feather-bedded industries of this country. This is a serious lesson to learn.
The time has now come when agriculture has been squeezed too long. I am being perfectly serious. I know good farmers who are thinking that they are now at the point where they should cut labour and reduce production and go in for output per man and per unit instead of output per acre. This is a right and proper thing to do if we have plenty of land. It is what the Americans do with their vast areas of land, but if we want, as the Plan says, to get the major part of the increase in consumption from home production then the Government will have to look at their techniques again. The time has come when they should look at production per acre. To do this, I am afraid they will have to put up farmers' prices. I say "I am afraid". I would welcome it, because the farmers have done a good job, and I think that if other industries had done as well this country would be in a far better position than it is now.
Competition and incentive are essential. The hon. Member for Birkenhead (Mr. Dell) made the point that in West Germany they have, of course, done some planning. Dr. Erhard has been insistent the whole time that the forces of competition must be at work in the West German economy. Of course he is right. Of course it is obvious, but this is the point which the Government appear to be completely missing. I know this is a simple point. I know that this is a point Adam Smith put rather well, but there is no mention of it in the National Plan, and it is a very bad and wrong omission. We have, of course, got to have incentive, and Government policy here does not appear to me to be a policy which will produce a lot of go-

ahead among young firms in order to stimulate the older firms.
They appear at this moment to be encouraging the retention of money by the larger firms, and, although modified somewhat, they still hinder the small firms, the close-controlled ones, and they would get a much better feeling, and provide a much bigger stimulus to industry, if they encouraged the large firms to pay out more of their money in dividends and then had to go to the market for income, instead of piling up that amount. Here again West Germany sets an example, and she has obtained double the rate of expansion which this Plan sets out to do. The Monopolies Commission needs looking at. There have been 23 investigations, and 20 cases where a bad report was made and no action has been taken. The United States, which has succeeded in keeping its cost of living level for about six years, has been very strong indeed in its monopoly and cartel laws. I am perfectly certain that this has got to be looked at, and looked at in a much harder manner than the Government are doing at the present time.
In taxation, if the Government want to be fair they ought to look at the spread of wealth, and attack, instead of the incomes made by useful people, large inherited fortunes, and see that quite a lot of families who inherit them are not spoiled and made useless to the nation because they have got too much money. Estate Duty being a voluntary tax, the Government could get a great deal of money from this source, and do a great deal to mend what is a general feeling in the country about the working of Estate Duty.
I think that the Government have made one great omission from the Plan, and that is that there is no desire to spread wealth and responsibility through co-ownership in industry. The Government have consistently failed to recognise that this is one of the most important factors—I do not say the only one—in the creation of the spread of co-operation in industry which can produce wealth. It is recognised by some of the large firms. It is recognised, of course, in I.C.I. It is recognised, too, in West Germany, where they now have a new second law enabling the trade unions to negotiate for precisely


this sort of benefit for the workers, and enabling firms to pay bonuses of up to about £30 without tax when it is put into savings accounts or invested in industry. This is the sort of spirit of co-operation which we need in this country, and it is one which the Government do not appear to be encouraging.
I now want to sit down, and all the people who have been hopping up and down will be very glad of it, and be able to leap on to their feet and get stuck into their own speeches which, of course, will be infinitely more valuable than anything that has gone before. I should like, however, to make one more point, and that is about the lack of go in this country. I remember that in 1959, when the Tories were ineffectually negotiating about what they thought would be a European free trade area, at one point—at least, the papers here played it up at one point—it looked as though we should succeed, and throughout the country there was a feeling of apprehensive excitement, and people were prepared to face the competition and take the opportunity of a bigger market.
After that fell through, the whole thing fell flat once again, until we had the negotiations to enter the Common Market, which the Tories also mucked up. However, I will give them credit for good intentions. Then again we had in this country a real feeling of vitality, in political life and business life, and people were preparing to face the great challenge. Again, since then, we have fallen flat. I do not think, quite frankly, that the new National Plan, in spite of the speeches of some hon. Members opposite, has provided precisely that sort of excitement. Nevertheless, it is a step forward, and the Government would improve it greatly if they would recognise what they have been loth to recognise for a long time, that the mass of exporting from this country is done by private people, and that they must be encouraged, and that they must also have more competition to make them efficient. When they recognise this, the Government may become a good Government as well as a Labour Government.

Mr. Deputy Speaker (Mr. Roderic Bowen): Mr. Derek Page.

8.10 p.m.

Mr. Derek Page: Mr. Deputy Speaker, may I say what a pleasure it is to speak under your guidance for the first time.
I have the highest praise for the National Plan, and in business circles have found it welcomed very widely, and from some of the most surprising quarters. However, it is only an indication, and we must be on our toes all the time in analysing its strengths and weaknesses, and strengthening it where necessary, and I am sure that my right hon. Friend the First Secretary of State will accept any criticisms that I make in the constructive spirit in which they are intended.
I should like, first, to make some mention of my right hon. Friend's intentions with regard to development districts. It has been widely stated, and welcomed, that the new measures are intended to aid the economies in the development districts. I remember the hon. Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott) speaking of the image of the North-East as being a depressed barren area. That certainly is not the way in which some of us in the East Anglian region look on the development districts. We tend to look on them as comparatively flowing with milk and honey because earnings in those areas are very much higher than they are in East Anglia.
For instance, average earnings in the King's Lynn area are about £13 a week, which is about £4 a week less than those in the North-East. They are about £3 a week less than those on Merseyside, and about 30s. a week less than in Northern Ireland, which is supposed to be the worst of the lot, yet these are the areas which getting help, and apparently are to get more, and taxes from East Anglia go to provide that assistance. Thousands of workers in my constituency get less for a full week's work than the average family in the North-East gets by way of National Assistance. This seems to be Robin Hood in reverse—robbing the poor to help the comparatively rich.
I agree that areas of unemployment need help, but I beg the Department of Economic Affairs to think carefully about the criteria by which development district boundaries are decided, because although in East Anglia we do not, thank goodness,


have the unemployment which would qualify us for help under the 1957 Act, we do have a great need for economic assistance to raise the economic tone of the area. As it is obvious that many of the forms of aid which are coming in the future by way of tax incentives, grants and help to local authorities, and so on, are to be geared to the development districts, it becomes more than ever necessary to have a really logical basis on which to allocate this aid.
The Achilles heel of the National Plan is the balance of payments problem. I have no doubt that if Britain were an isolated economic unit, completely self-contained, there would be comparatively little difficulty in fulfilling the Plan, but it is obvious that we are in danger of having our Plan stifled and the brake put on from time to time if we run into balance of payments problems as we have done so often in the past. This is certainly the gravest danger to our Plan. During the past year we have taken certain measures to help our balance of payments, and these have been very successful up to date, but it is doubtful whether the tremendous spurt in exports last year is likely to be maintained during the next year or two.
I wish to draw to the attention of the Department of Economic Affairs the need to be ready to impose quantitative controls on imports, because I feel that the time may come, sooner than it imagines, when these controls may be necessary, remembering that they are more selective, more specific, and more measurable than the purely financial controls that we have at the moment.
No one likes restrictions on imports, and the ultimate end to our balance of payments problem must come from greater competitiveness in exports.

Sir E. Boyle: There is one question about quantitative controls on imports which always bothers me. I do not take a doctrinaire view of this. Does the hon. Gentleman think we could work out a scheme which was rational from the point of view of our needs in Britain, but which did not handicap the backward countries? Even as it is the Plan means that we shall do less for the backward countries than we should like to do by way of aid. Is not there a danger of making it harder for them to increase their trading opportunities?

Mr. Page: As I understood it, the backward countries are dependent mainly on basic materials for their export. Our main difficulties have been with imports of semi-manufactured and manufactured goods, and these are the ones in respect of which quantitative controls would be most welcome.
It is extremely important to analyse very carefully why we have not been as successful as we should have been in our export performance, and to be as objective as we can in this. I have looked up a number of factors of production, bearing in mind the suggestion made by my hon. Friend the Member for Birkenhead (Mr. Dell) that prices are not the only consideration. I do not agree with him. I think that prices are the main consideration. In my experience of selling chemicals abroad I have found that they are the overriding consideration, but I must admit that when dealing with machinery and machine tools quality and modern design are also of great importance, and one can sometimes get over the price barrier if one has something new and modern to sell. Price is, however, of major importance, and, looking at the reason why our competitiveness has not been what it should be, it is interesting to note some of the factors of production, such as the tax load on industry in this country, to which reference has been made by hon. Gentlemen opposite.
Comparisons are a little tricky, but I believe it is essential to take into account social security payments as well as direct and indirect taxation in working out the total load on industry. If we do this, we see that in 1962, for instance, the percentage of the national product taken in tax in Britain was 34·3 per cent., in Germany 41 per cent., in France 41·1 per cent., and in one or two other places, particularly the United States, it was less, 30·9 per cent., but remembering that West Germany in particular was taking our foreign trade, it is difficult to see how this could have been a major factor in suppressing our competitiveness.

Mr. George Y. Mackie: Would not the hon. Gentleman agree that the way in which the tax is applied is as important as the amount of tax collected?

Mr. Page: I agree with the hon. Gentleman. In fact, I intend to deal with that later in my speech.
Average working hours in industry in 1963 were as follows: Britain 46·1 hours per week, France 45·7, West Germany 43·9 and the United States 40·2 hours. All these major competitors were working considerably fewer hours per week than we were. The figure for Japan was 46·3. That is 10 minutes a week more than the workers in British industry. So it is not the number of hours worked that is the deciding factor. I remember raising this matter at a recent meeting and being told, "Ah, but the British worker does not put his back into it like the German worker". Anybody who thinks in that way ought to go out to Germany and leave those of us here who believe that British workers are as good as anybody else, given the tools to do the job.
The increase in wage rates over the decade 1950 to 1960 was as follows: Britain, 57 per cent.; Italy, 77 per cent.; Germany, 85 per cent., and France, 115 per cent.—so the increase is not the relevant factor. It cannot be. If it is not the result of these labour factors in production, what else can it be? The wartime saying, "Give us the tools and we will finish the job" is equally true in peace, especially in exports. It is interesting to weigh up the percentage of the gross national product of these countries which was ploughed back into fixed investment. I will take the decade 1950–60, which was the basis on which our present industrial set-up was built. Our production now depends on the money ploughed in then. The figures are as follows: Britain, 16 per cent.; United States, 18 per cent.; France, 19 per cent.; Sweden, 21 per cent.; Germany, 24 per cent., and Japan, 29 per cent. Time after time it has been the countries who have ploughed the money back—ploughed the seed corn back—who have got the results. This stands out clearly as the major factor in the question why we did not come up to our competitors.
I was interested to read a booklet called. "Britain and Europe", which was issued two days ago by one of the major banking groups in this country. It says:
One of the major factors behind a rising level of industrial output is the level of investment.
It points out that
Between 1958 and 1963 the share of private investment in the gross national product of the

E.E.C. increased from 21·5 per cent. to 26·2 per cent.
In Britain, during the same period, the figure rose from 15·4 per cent. to 16·7 per cent. If we are not ploughing the national product back into new plant and industry I do not see how we can expect to compete.
I certainly accept the fact that under the right conditions competition is a tremendous spur to production. It has certainly worked in farming. But in farming the fact that so many grants from the Government are linked to specific improvements has also been of major help to the industry. There are many industries in which competition simply cannot exist, by virtue of the fact that they are technically monopolies. This problem requires completely different handling.
Under the National Plan the level of investment is due to rise. The figure of 7 per cent. a year has been mentioned. This sounds very impressive, and it is—and it is very necessary—but I am a little disturbed by the fact that according to my pencilled calculations we must make allowance for the fact that the gross national product is also assumed to be rising, and we must take investment into account in comparison with the size of the gross national product at the time. By making allowance for this 25 per cent. assumed growth in the time, at the end of the five-year period the fixed investment would be 20 per cent. of the gross national product, compared with approximately 18 per cent. at present, or an average of 19 per cent. over the five years. This compares with about 25 per cent. or 26 per cent. in Germany now.
There is, therefore, a need for urgent attention to be given by the D.E.A. to this question of the necessity for a much quicker growth in fixed investment, especially in industry. I find it difficult to see how we can break the export barrier unless this is done, because it is providing our workers with the tools.
I want to conclude with some comments on the chemical industry. I have worked in this industry for all my working life. My hon. Friend the Member for Birkenhead said earlier that he doubted whether the failure of the chemical industry to invest and expand sufficiently was due purely to fear, as has


been suggested in recent publications. I rather agree with him. I believe that a number of factors are at work which require attention. First, there is the lack of indigenous raw materials in Britain. But Britain is not the only country to have this lack of sulphur and oil, for instance. We are also at a slight but increasing disadvantage in our port facilities. A vast improvement in port facilities would put us on a much more even footing with the Common Market in the matter of competition, but this costs money.
The second factor is the relatively small size of the United Kingdom market. Although I am not in favour of plunging headlong into the Common Market I appreciate that under the right conditions a larger market is of great assistance. The Common Market countries and the United States both have a big advantage in the chemical industry, because this is an industry where giant units are necessary in order to obtain optimum results. This involves monopolies, which again raise the other difficulties to which I have referred.
Another point is that certain of the smaller industrial countries overcome the disadvantages that I have mentioned by generous governmental aid of a direct or an indirect nature, such as the Japanese tax concessions on exports which may be equivalent to reducing production costs by 10 per cent. or 15 per cent. compared with the United Kingdom.
The effective cost of money is also important in the development of the British chemical industry. We have a very high ratio of equity capital to loan capital in the industry, and this needs detailed expert attention. If we are at a disadvantage in this respect compared to our major competitors it is up to the Treasury to examine the problem carefully and see what can be done about it. I will not detain the House with the details, but if my hon. Friend would like them I shall be glad to supply them.
What can be done to help in this problem of the chemical industry? One thing I would suggest is that tax concessions which we are considering should be linked to the export performance, if it is the type of industry which could be expected to export. Certain of the heavy chemical industries cannot be expected

to export, but most of the chemical industry can.
In Japan, for instance, it is well known that 80 per cent. of the profits derived from exports are free from tax, and there is obviously a tendency for the companies concerned to load their costs on to the home production. This plainly needs watching, but it is something which we should consider in our own difficulties.
Secondly, I believe that we might consider special incentives in the case of those chemical processes whose optimum size is too big for the British market. There are many such processes now which, to be efficiently operated, need to be of a size which is far too big for the British market alone to absorb. This means that firms are deterred from investing. Capital aid in setting up such plants would cause very considerable savings.
I have worked out one example for a project. Again, I should be pleased to supply the details of this if they are of interest. This chemical costs about £1 million a year in foreign currency to Britain. By a grant of about £250,000 I believe that we could set up an optimum-sized plant which would eliminate the need for these imports. This is another means of safeguarding our balance of trade, but it will cost money.
I have suggested several means of helping in this critical balance of payments position which I regard as vital to the fulfilment of the Plan, but all the measures I have suggested are liable to cost money—money for investment and for incentives. It is logical and necessary to ask where on earth these incentives are to come from.
I believe that the Opposition have failed to answer this. The only indication we have had is the suggestion of the slashing of farm subsidies, and this is quite unacceptable in my part of the world. It is imperative that we cut our overseas and arms costs. I do not see how we can fulfil the Plan without this. My hon. Friend the Member for Birkenhead pointed out that considerable savings in overseas expenditure could be achieved by cutting expenditure on foreign bases. I agree with him here, but I believe that it goes deeper than this


and that, if we are to get the vast increase in investment in British industry, the slack can be found only by cutting about £500 million from the arrms burden.

8.31 p.m.

Mr. Peter Hordern: I hope that the hon. Member for King's Lynn (Mr. Derek Page) will forgive me if I do not follow all his remarks very closely, particularly those concerned with his constituency. He said at one stage that he thought he had discovered one Achilles heel in the Plan, but by the time he had finished, I thought that Achilles had changed his appearance so much as to be covered with heels.
The First Secretary of State, with his usual exuberance, has sought to introduce the Plan as a new dimension in the conduct of our economic affairs. In this, he has succeeded far beyond his wildest dreams. It can scarcely ever have occurred that a Government who have failed so dismally in the conduct of their economic objectives should be able to get away with it by talking about 1970. There have been dictators in the past who have had domestic troubles and have managed to distract the attention of their people by causing trouble abroad, but the measure of the First Secretary's achievement is that he has managed to blind the nation to its present condition by means of an economic document dealing with 1970.
Its full extent can be observed only by judging what the current situation is. When the First Secretary appeared on television to discuss the National Plan, he said that there was no credit squeeze.—[Interruption.] This is perfectly true. I was with him on the same programme. He said it quite distinctly.
What he should have said was that the most stringent credit squeeze in living memory simply had not worked. I do not know whether the First Secretary has a word with the Chancellor these days—I hope he does—but, if he does, I am sure that the Chancellor could remind him of the July measures, the letter from the Governor of the Bank of England to the clearing banks and the Chancellor's hire-purchase restrictions.
However, despite all these measures and the enormous volume of increased taxation, the pressure on our resources

is as great now as it has ever been. Unemployment is low, wages and costs are rising and wage drift, I understand from the last reference in April, is now 50 per cent. above the level at which it was rising last year.
Meanwhile, the National Board for Prices and Incomes talks about "disturbance compensation", an altogether new feature, and the 3½ per cent. norm is everywhere derided, and by no one more than by Government employees. The Chancellor himself has said that earnings rose by 8 per cent. in the first eight months of this year.
It may be that none of these things matters. If our balance of trade deficit can be kept as low as it has been in recent months and if the balance of payments trend continues, we should be able to reach equilibrium by the end of next year. However, I am sure that the First Secretary would agree that the situation is fraught with doubts and uncertainties.
Is it reasonable, for example, to expect the balance of payments position to improve quite as much as it has improved in the second quarter when the investment trusts repatriated so many of their dollar securities? How much of the splendid rise in exports to the United States shown in last month's figures was due to the threat of steel stoppages in that country? These local factors must be taken into account. Will the balance of payments position continue to improve next year in the face of lengthening order books for home deliveries and declining ones for exports?
Production is static. The figure for August at 132 is the same at that for December. Productivity is actually lower if one takes the lastest available figures. In addition, as the First Secretary said, 1,000 million dollars has to be repaid in 2½ years—or less than that—and a further 1,400 million dollars in less than five years. Against this we have as our armament the National Plan and the ebullience of the First Secretary. If it could be shown that central planning with or without central control works well in all other countries, that would be one thing, but there is no such evidence. If it could be shown that the nature of our economy is particularly suited to central planning, that, again, would be another


Matter; that would be a good argument. But that is not true either.
If it could be shown that the adoption of the Plan would not actually cause harm to the economy, then it might be tolerable on the basis that it is always nice to have a plan. But even this is not possible. The plain fact is that if this plan is adopted, then those things which should be done now to restore the economy will be left undone, and we shall remain perhaps the favourite but certainly the ever-present and the ageing and elderly retainer of the free world.
There is now an unholy, indeed calculating alliance between the Socialist politician and certain types of economist. Economics has become an "in" profession, especially if one goes in for forecasting. One has a new name—an econometrician—a model to play with and, above all, security and respectability.
Who would fardels bear,
To grunt and sweat under a weary life.
when he could join the Department of Economic Affairs? He certainly could not be sacked for not doing his job, for nobody can possibly tell that he is making mistakes when talking about the future.
I will not labour the point about the absurd questionnaire which was sent to industry or the constant use of the word "evidence" when what is meant is guesswork.

Mr. George Brown: No.

Mr. Hordern: Where did the figure of 25 per cent. spring from? It is conceded that a 25 per cent. rate bears no relation to growth achieved in the past. It means an annual average rate of growth of 3·8 per cent. whereas public expenditure is to grow by 4¼ per cent. annually. Can the Minister of State for Economic Affairs, who is to wind up the debate, tell us how we stand at the moment with regard to productivity and the growth of public expenditure, particularly the latter? We are told that public expenditure is to grow by 4¼ per cent. a year. Am I not right in saying that it has grown this year by about 10·8 per cent.?

Mr. George Brown: Let us hear the hon. Member's answers to these questions.

Mr. Hordern: Would the right hon. Gentleman explain the position? The

figures which I have to last April show an actual decline in productivity. If the growth in public expenditure has been 10·8 per cent., how do the Government propose to get it down to 4¼ per cent. next year?

Mr. George Brown: What is the hon. Member's answer?

Mr. Hordern: These are all questions which we are entitled to ask. Even if I accept a 25 per cent. growth rate by 1970, the industrial inquiry revealed a likely growth of only 3·2 per cent. a year, leaving a manpower gap of 400,000. The First Secretary has said that one answer is by filling in the development districts, which will gain 200,000 workers. But I should have thought that if a 25 per cent. growth rate leaves us with 400,000 workers too few, the thing to do is to reduce the growth rate until it matches the number of workers likely to be available. That is the simple solution. But of course if that were to be done the growth rate for exports would have to be reduced from a figure of 5¼ per cent. and this would bring down the whole basis of this so-called plan like a house of cards.
How can we say with any precision what the level of exports will be in five years' time? What shred of reality can be given to estimates of other countries' import requirements in that period? It is this extraordinary mixture of fact, fancies and hopes, all cloaked in a pseudo-scientific language to create an overall semblance of veracity, which is its most sickening feature. Where we once had a national cake to divide, we now have a national pie in the sky. Even if one can bring oneself to stomach the language and assumptions of the Plan, there are some really remarkable statements and omissions—

Sir K. Pickthorn: On a point of order. Could you, Mr. Deputy Speaker, persuade the First Secretary and the Minister of State for Economic Affairs to either talk just loud enough to be heard or to talk less loudly than they have been speaking throughout my hon. Friend's speech?

Mr. Deputy Speaker (Mr. Roderic Bowen): If any hon. Gentleman wishes to make an intervention he should do so in a standing position.

Mr. George Brown: In the light of what the hon. Member for Horsham (Mr. Hordern) has been saying in such an impressive way, why is he not going to vote against the Motion, which says that we welcome the Plan which he is denouncing in such terms?

Mr. Hordern: I thank the right hon. Gentleman for that intervention. I thought that my right hon. Friend had explained the position—that we welcome certain parts of the Plan. I welcome very little of it indeed. In fact, I have not so far been able to find one part of it that I welcome. However, I am sure that if I read it carefully enough I will be able to find something in it that I could welcome.
I return to the subject at hand because I want the Minister of State to reply to certain detailed questions. For example, what is meant by the fundamental changes which will be required in the steel industry? Does that mean nationalisation, or not? If it does, why does the Plan not say so specifically? If it means nationalisation, how can it in any way be called a National Plan?
We then come to the question of investment. Industry, the Plan tells us, has a vital rôle to play in maintaining its investment programmes and that any temporary period of slack should be regarded as an opportunity to reorganise and reequip. The Plan involves an increase in industrial investment of 7 per cent. per year, which is pretty rich. First, the Government introduce the most stringent credit squeeze ever. Then they devalue the investment allowances by one-third by means of the Corporation Tax. During the whole of our debates on the Finance Act I was never satisfied that the Chancellor really understood the Corporation Tax. I am certain that the First Secretary never did.
We have, therefore, had to witness not just the astonishing sight of the Chancellor driving with his foot permanently on the brake, and that of the First Secretary pressing hard on the accelerator, both at once, but also the obvious fact that neither of them has the least idea how the engine really works.
That it has survived at all bears witness of the astonishing industrial and financial strength of Britain. But now I see, from the usually well-informed leak to the

Observer, that there are to be tax allowances of up to 15 per cent. of the cost of a new machine. Not yet, of course—they are to be phased in. If there is any substance in this report—and I strongly suspect that there is—then industry should know that their investment allowances have been cut back substantially. That is the measure of the incentives the Government are prepared to give to carrying out the National Plan. And let it be said that one only gets these incentives if the Government approve of one's product, for like every Socialist Government, the Government alone know best just what should be produced.
Of all the pharisaical pronouncements that appear in such profusion, surely one of the most striking is that which refers to savings. The more rapid the rise in the ratio of savings to disposable income, the lower will be the taxation required, we are told. How infinitely refreshing. How long did it take this new econometrician and public relations-ridden Department to work that out? There is not a word of encouragement, not a note of incentive to encourage savings. But, then, a high level of savings has never been the feature of a Socialist Government. It is difficult enough to entrust them with a vote, but to entrust one's money as well is really asking too much.
My real objection to the Plan lies not in its obvious shortcomings but in the rôle it is expected to play. It will be used, no doubt, by the trade unions as a bargaining point in wage negotiations. That is only to be expected. If it is to have any meaning to either side of industry, that is what is bound to follow. The really fundamental objection to the Plan is the principle that industry should be expected to take on responsibility which it is properly the Government's to shoulder. When it goes wrong, as it is certain to do—not least because it was devised before the Chancellor's July measures—we shall have the unhappy spectacle of the Government limping about pouring money into goods that cannot sell and generally behaving with the finesse that one associates with the First Secretary, that incarnation of Mr. Therm or Mr. High-Speed Gas himself.
Meanwhile, from the Treasury, wafts a perpetual smell of burning rubber as the Chancellor slams on the brakes,


giving a passable imitation of Michelin's "Mr. Pneu", and never the twain shall meet. For its own sake, industry cannot and should not get involved in what is designed as a confidence trick to implicate it in the Government's failure to manage the economy.
There has been a lot of talk about planning in other countries. Those countries with the longest experience of planning are the Communist countries. I rather like the story which appeared in the Daily Telegraph some weeks ago about the little profits in Russia which got missed out of the general scheme of things and were left out by the national planning. They were used to make consumer goods and within a very short time the profits had become the richest in Russia. It points a moral to the Government's idea of planning. France has planning but it has had five devaluations since the war, although it has virtually a completely self-supporting economy. Sweden has planning, but it has about one-third of the number of trade unions there are in this country. The country which has never had nationalisation of any kind is Western Germany. It has no industrial plan at all. That country is roughly the same size as ours in area and population, yet its production has increased by 100 per cent. since 1963 compared with our 36 per cent., and wages have run a parallel course.
Investment is far higher in Germany, and although costs have risen there they are now beginning to feel the real benefits of automation, because restrictive practices do not exist there. There is no need for a national plan in Germany, and there is no place for a national plan here if it is to be used, as this one palpably is, as an excuse not to take unpopular action.
I am conscious of the fact that it is very easy to be critical of the Plan. It is, after all, a useful exercise in what might happen given certain extraordinary assumptions of growth. How to get the growth—that is the rub, and it is no use talking in terms of an incomes policy alone; there is not the time, even if there was good will on all sides. The truth is that unless we are prepared to recognise that there are structural faults in our economic machine, with too many unofficial strikes and too many restrict-

tive practices on both sides, and that these must be dealt with by legislation now, we cannot expect to maintain our existing standards, let alone advance them.
And what is the point of advancing them with taxation as it is today? There is in the country today a new class of people, wholly professional in outlook, who care not at all for party politics but feel an affinity with those of their own age across the Channel whom they meet on business or pleasure. These are the pacemakers, and the Government that can provide incentives for them will reap a bigger harvest than was ever dreamed of in this stillborn document, the National Plan. There is indeed a prize to be won—the self-respect of England.

8.47 p.m.

Dr. Jeremy Bray: If he has done nothing else, the hon. Member for Horsham (Mr. Hordern) has given an admirable demonstration of schizophrenia on the other side of the House. I understand that the hon. Member was at one time at Geelong Grammar School at a place called Treetops out in the bush, about which we have heard a lot of talk recently, and I wonder whether one dark night he was exchanged for something which came down from a tree. The hon. Member also shows alarmingly a certain cynicism which appears among sections of people in the City. This is a disturbing feature of the country today—this appalling gap between the practical and competent in industry and the kind of dunderheadedness which the hon. Member displayed in his speech.

Mr. Hordern: Why not listen to the argument and give us some facts instead of casting insults about, although that is entirely typical of the hon. Member?

Dr. Bray: If the hon. Member cares to read his speech later and compare it with what I propose to say, he will see that I have listened to the argument and that I am giving the facts.
If the hon. Member had been in the last Parliament he would have found that it is a new departure and a privilege to the House to be treated with respect and to have a plan brought to us, instead of being by-passed as was the case under the


previous Government when N.E.D.C. reports were not even presented to Parliament. The five-year expenditure survey which the last Government produced was not debated in the House either. The much boasted costed programme on which hon. Members opposite fought the election was not even subjected to the scrutiny of this place.
If it has done nothing else, the Plan has given us in this place the right to review public expenditure at the time when these decisions are under consideration and before they are finally made. We have in the projections for 1970 a distribution of expenditure between the different services which not all of us may like, but, because they have been published, we can debate them here and in the country, and, no doubt, notice will be taken of the feeling expressed. My hon. Friend the Member for Hitchin (Mrs. Shirley Williams) mentioned the treatment of the health services. I add the treatment of pensions. We may not like particular conclusions of the Plan, but what we have to say is either that we add to this and subtract from that, as the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) suggested in an earlier intervention, or we have to produce some means or new ideas for increasing production.
This is a new departure in Government. I think that it will in due course require a new departure in Parliamentary procedure. We have a highly developed procedure in the House for financial matters, which perhaps, is a little out of touch with the actual conduct of financial business by the Government, but it still remains the fact that ultimate financial power lies in this House. It is hard to say that any crucial rôle has been taken by the House in the process of planning hitherto, and we must look, as planning become more and more highly developed, as I am convinced it will, to the part which the House of Commons can play in the drafting, the revision and the rolling on of the Plan. We have, necessarily, had a wide-ranging debate today, and it would not, perhaps, have helped if we had extended it for two or three days. We need to consider whether the kind of Committee structure which we have developed for treating financial matters

should be extended to treating the Plan also.
If we are making important new advances in the machinery of Government, still more important is the impact that we are making potentially on the management and structure of the economy. Obviously, there is room for a great deal of debate, and we have had some constructive arguments from the benches opposite. The hon. Member for Worthing (Mr. Higgins) put forward some proposals about the publication of alternative plans, the discussion of them and so on. But, in my view, the basic process still needs to be more clearly understood in this place and in the country before we can work out precisely what the methods of planning should be.
First, we have to realise that it is the decision-makers whom we are trying to assist, whether they be in industry or in Government. Second, those decision makers must have the information brought to them in the place where they are and in a form relevant to the decisions they have to make. It is an undoubted fact that the decisions are made in firms, not in industries. The more rapidly changing the situation, the greater the need for an increase in the flow of information. The price mechanism is fine, but it is not sufficient to carry the information we need so it has to have the overdrive of planning.
Undoubtedly, it is a complicated problem. In passing, during the course of his speech, the First Secretary said that we had to treat the Plan at industry level and not at firm level simply because of the sheer size of the problem. If one speaks in terms of the published document, what my right hon. Friend says is plainly right. But, even in the published document, one can look at some of the detail which is given. For example, zinc is treated as a separate industry. This is one firm. Copper, treated as a separate industry, is about one-tenth of one firm. Far greater tonnage and value products than zinc, such as polythene, PVC and the like do not rank mention in the Plan at all. Certainly it is a difficult problem. Are we to be bound by the statistical classifications of yesterday or by the industrial realities of today?
Inheriting the system from the previous Government, we had very little alternative but to follow the lines that we have


done during the past year. But in the rolling on of the plan we have to think much more widely than has yet been possible. Under the economic dogma of the party opposite, the individual firms have come to be regarded as an officially endorsed secret conspiracy into which it is improper to pry. So improper is it that no Government must know about a particular firm and the very information about the firm is dissolved in the way in which the Government collects information about it. It is regarded as an employer of labour, and the Ministry of Labour is interested in that. On the other hand, it is regarded by the Board of Trade as a producer, and the Board of Trade is interested in that. But no one sees it as an intelligent decision-making unit on its own. I hope in the next Session of Parliament that in company law we shall get back to the idea of a limited liability company as a public body which is open to inspection in all aspects of its business and accountable to the public, to its shareholders, its creditors and debtors, and therefore amenable to planning as well.
Obviously, there are methodological complications. What do we want to do with the individual firm? I would suggest that at the firm level it is a matter of encouraging the internal procedures in the firm which needs greater efficiency. The apparatus of inter-firm comparison and investment appraisal and so on is being encouraged by N.E.D.C. and D.E.A. at the moment. But then there is a level one-up from the firm, of analysing the problems within a particular area of industry or a particular locality of the country where there is a need to put together a number of different firms. I am told that at present, for example, we have £30 million worth excess stock of shoes lying round the country unsaleable, and the shoe trade has taken a knock of £30 million of undisposable stock this year. A scheme has been proposed for ironing out the stock cycle in shoes, but it has been ignored by the industry and given no encouragement by the Government.
Similar schemes have been working for a number of years in other fields, but we do not have the apparatus and encouragement by which the lessons learned in one industry can be transferred to an-

other. It is said that that is up to the people on the ground, but is it? When the telephone was invented and a line was installed between Buckingham Palace and Downing Street, was it argued that if the Prime Minister wanted to ring up the Chancellor, then would be the time to put a line across there, too? That would be a grossly inefficient principle on which to organise a telephone exchange.
The same applies to a modern economy. If we leave the information and planning system to grow like Topsy, we shall get an extremely inefficient information system. It needs to be consciously designed, which means a redesigning of the Government's statistical service on the basis of a system to give aid to the decision makers. Necessarily, it grows up into higher levels of model. There is a tendency to argue that because a national model cannot now be brought down to the firm level, there is nothing that can be done about the firm. That is nonsense. One gets the system building up from local analyses in various sectors of the economy, and one gets a complex of models being developed in Government Departments in one way or another, but we have not had the time to get a consciously developed scheme of models or philosophy of planning.
That obviously could not be achieved in the difficulties of the first year of office, but I hope that in the process of rolling on the Plan, we shall see some of the new ideas, which are being developed very imaginatively in industry as well as in the universities and Government Departments, made the officially established doctrine of planning.

9.0 p.m.

Sir Edward Boyle: The hon. Member for Middlesbrough, West (Dr. Bray), once he got beyond his opening paragraph, said a number of things with which I think I would agree, and I will come to them at the appropriate point in my remarks.
We have been discussing the National Plan. Perhaps the right way to consider it is in the context of a wider question—the whole proper scope of economic intervention by the Government. I want to consider for a few minutes the questions of how much intervention ought there to be, of what kind and for what purpose.
Up to a point, I think that there would be widespread agreement in the House about the answers to those questions. Obviously, if we want to preserve full employment, to curb inflation and to safeguard our balance of payments, the Government must ensure a balance between the total of our available economic resources and the claims made upon them. Furthermore, I think that we should all agree on this side that, quite apart from the restraints imposed by our balance of payments problem and by the need to defend sterling, we shall not secure growth and efficiency if we allow the economy to become overheated. It was Sir Robert Hall who said in a Rede lecture:
The general stimulus to enterprise from high profits produces a counteracting effect
when
the profits themselves become too easy to make".
As a number of hon. Members have said, it is obviously wrong to have a situation in which profits become too easy to make.
The difficult questions about intervention—and some of the questions that we have been considering today—arise when one goes on from the objective of controlling the overall level of demand to consider how far the Government should intervene to influence the whole future development of our economy. Here there are two key questions. First, should the Government intervene to try to bring about a faster rate of growth, and, if so, how? Secondly, should the Government attempt not just to encourage growth but to shape our economy as it develops?
It is clearly right that the Government should deliberately make it their business to encourage faster growth. I say that for two main reasons. First, as our own policy document has said, we are not afraid of the consequences of prosperity, and my right hon. Friend the Leader of the Opposition has made it clear in a number of speeches that we want to see a widened range of choice and opportunity. But there is a second reason which is no less important. We also believe, as we have said, in people leading a more worthwhile life in better surroundings; and public services such as education, health, old people's homes or the clearance of derelict land play a creative rôle in bringing about a more civilised society,

so that we want as a nation to be able to afford more of these things. I would say that there is no real difference between those two reasons for according a high priority to growth, because, as many hon. Members have said, there is an increasing desire today from individuals for better environmental standards.
In his speech the First Secretary referred to private affluence and public squalor. It sounded as though he referred to it almost out of habit. I say two things to him about that. First, the increase in the annual level of public social capital spending in the last Parliament was the most rapid increase we have ever had in our national history.

Mr. George Brown: It was not high enough.

Sir E. Boyle: The right hon. Gentleman says "It was not high enough", but I should be very surprised if during the next five years we achieved as rapid a climb as from £735 million a year to £1,300 million a year, which we achieved in the last Parliament.
Secondly, with regard to education, which is one of the most important services from the point of view of its social effect, the rate of climb envisaged in the National Plan will, in fact, be a little slower than the rate that we actually achieved during the last five years.
I think that what I have said partly answers the second question I raised, namely, how far should the Government try to shape our economy. Clearly, major decisions on public expenditure must affect the shape of our economy, especially when these involve large sums of money and large amounts of scarce resources, including resources of scarce manpower, committed for years ahead. I am thinking here of the defence and education programmes. It is a fact that 60 per cent. of all those who have had full-time higher education are now employed in the public sector, which is a very high proportion.
None the less—and here I think we come to a real difference between the two sides of the House—we do not believe that Government intervention to shape the economy is as important as intervention to encourage growth. I contrast this view with that of the hon. Member for Middlesbrough, West, whose pamphlet, "The New Economy", I read with


much interest. I noticed this sentence in it:
What planning is trying to do is to get as much as possible out of the economy now and in the years ahead, and to shape the economy in whatever we may feel to be a desirable form.
The latter half of that sentence would never have been written by anyone on this side of the House. If the hon. Gentleman is referring purely to the balance between the public and the private sectors well and good, although, if so, I think that his words in that context are a little misleading. But if he is referring also to private industry we would sharply disagree for two reasons. First, where private industry is concerned, we believe that consumer preference should be paramount. Secondly, and more important in a period of rapid technological change, we do not believe that any Government can forecast which industries, which firms or even which technologies will be most important to the nation in ten or even five years' time.

Mr. Robert Maxwell: Is the Opposition likely to remain determined to avoid shaping the economy, having regard to the fact that, for example, the N.F.U. is bringing tremendous pressure on the Labour Party to adopt aspects of the National Plan and shape our agricultural production through increased productivity, saying that the Opposition is determined that we should join the Common Market? Is it not the case that many businessmen are saying that they will keep Her Majesty's Loyal Opposition for 20 years so long as the Opposition continues to believe that nothing should be done about the shape of the economy?

Sir E. Boyle: I do not think that many businessmen would disagree with me when I say that one cannot tell which will be the most important industries or firms to the country five or ten years from now. New firms, and large octupus concerns branching out into new lines of activity, will be growing all the time. That is the point. I hope that we would all agree that the scope for planning and detailed Government economic intervention must be limited at a time when new and sophisticated technologies are coming forward with great frequency.
This is why the old slogan about nationalising "the commanding heights of the economy" has become so hopelessly out of date. The industrial landscape is constantly shifting. Therefore, we cannot agree that Government intervention to shape the economy is as important as intervention to encourage growth.
There are four ways in which the Government can help growth. The first is by generalised financial incentives—to encourage investment and industrial training as regional development. The hon. Member for King's Lynn (Mr. Derek Page) devoted quite a time to investment. During our period of office we doubled, from 6½ per cent. to 13 per cent., the proportion of the national income which went towards making net addition to our stock of physical capital—houses, factories and machines. That achievement alone makes nonsense of the slogan about "13 wasted years".
I would say two things about investment in the context of the National Plan. The Plan assumes a 7 per cent. a year increase in manufacturing investment. If we are to achieve anything like that figure, the Government will first have to be courageous about the measures to keep rising consumption in check.
On this point, I refer the First Secretary to what all of us on this side of the House thought to be the admirable and courageous speech of the hon. Member for Birmingham, All Saints (Mr. Walden), one of the best back bench speeches we have heard in this Parliament, in one of the July debates. Of course, the July measures were directed almost entirely against investment. It is a fact that the "Little Neddy" on building actually met to approve the proposal in the Plan to double the level of investments in construction on the very day after the Government clamped down on the industry and announced their intention to reintroduce controls.
I recognise that the right hon. Gentleman could not go further this afternoon, but I hope that it will not be long before the Chancellor of the Exchequer can make an announcement about a successor to the investment allowances. After all, the Corporation Tax had the effect of devaluing those allowances. Companies are uncertain about their cash flow, and


already there is a downward trend in investment so that it is extremely important that firms should know as soon as they can what their position will be.
The second way in which the Government can encourage growth is by a proper choice of priorities in the public sector. As I said earlier, we dissented from the choices made in July. We opposed the cut-back in roads, which anyhow will not become effective until next year, and also the cut-back in university starts and starts on technical colleges and colleges of education.
I remind the House that the figure which the Secretary of State for Education gave last week, when he said that about a quarter of university starts for the 15 months 1965–66 have been held back, amounts to nearly half of the extra money which the universities were allocated to accommodate the extra students for whom the Robbins Report said we must find places during the critical years of the bulge. If the Government want to be taken seriously as planners, they must avoid obvious nonsenses—and it is an obvious nonsense to cut capital programmes which the Plan itself recognises as essential, while doing nothing about the indiscriminate subsidy to school meals and milk which will cost just on £100 million in 1969–70. When the Minister of State replies, can he tell the House what will happen when the six months' moratorium comes to an end? Are we to have freedom of starting dates again after that?
The third way in which the Government can encourage growth is, of course, by encouraging the spread of information and the organised discussion of common problems. We agree entirely that "Little Neddies" must be fashioned into useful instruments for pushing aside obstacles to industrial efficiency. And we fully support the wider steps which are being taken within N.E.D.C. itself, such as the study of imports to try to discover why certain British products are not regarded by the British consumer as competitive, and how many industries in the light of that study can improve their efficiency.
Are the First Secretary and the Minister of State really satisfied with what the Minister of Technology is doing, or ought

to be doing, to reap the benefits for the whole of industry of scientific and technical progress, and to enable more firms to utilise the additional knowledge as it becomes available? I believe that the Ministry of Technology is no closer to industry as a whole than the old D.S.I.R. was. Indeed, I think that my belief is strengthened by the wording of page 49 of the National Plan.
We on this side of the House say that the job of the Minister of Technology is to go about the task of making the whole of industry more science-minded. Bearing in mind what the Prime Minister used to say, when he was in opposition, about science and technology and how he would "forge a new Britain in the white heat of the scientific revolution," altogether the most surprising paragraph in the whole National Plan is that which deals with Government support for science and technology and appears on page 179. It is very inconspicuous. It says:
The programmes described in the previous paragraphs represent nearly four-fifths of total expenditure. The remainder include a wide variety of activities—overseas aid, support for agriculture, industry, the railways, advanced technology, scientific research and other miscellaneous central Government activities;…Some of these will probably have to be slowed down to make room for the high-priority services.
I must say that there is not much of a white heat about that forge, as the First Secretary himself must agree. The last way a Government can, notionally at any rate, intervene to promote growth is by discriminating assistance to particular industries. I do not rule this out, but I believe that this sort of intervention should be used very sparingly. When it is used, it should normally be once and for all, for some particular purpose, as with the Conservative Government's Cotton Textile Scheme in 1959. Would the Minister of State agree that this sort of discriminating assistance to private industry, except where matters of location of industry are concerned, should be very much an exception?
I believe that the various kinds of economic interventions that I have just been considering are more important, and their relevance is certainly easier to understand, than the Plan which is the subject of this debate. There are many


severe criticisms which can justly be made of this Plan, and I thought that my hon. Friend the Member for Worthing (Mr. Higgins) was quite right when he said that it represents a political decision to adopt a growth target of 25 per cent., coupled with not always plausible attempts to make the figures fit somehow. I do not think that Professor Day, when he next writes on the Plan, will be entirely convinced with the right hon. Gentleman's explanation this afternoon. It may be true, as he says, that he is only asking us to produce in the next six years as much as in the previous seven, but none the less the right hon. Gentleman has not answered what is one of the most powerful of Professor Day's critcisms. Professor Day pointed out that it is quite reasonable to assume that the acceleration in our underlying growth rate will continue, but that this Plan assumes that the acceleration between the earlier and later parts of the 1960s will prove to be nearly three times as fast. I agree with Professor Day that that is a very big assumption indeed.
It is hard to describe the precise status of this document. It appears to set out a statistical model of what the British economy might look like in 1970, but it is a curious kind of model, because, as the hon. Member for Middlesbrough, West so rightly reminded us, the various predictions have very different degrees of validity. The prediction for electricity is probably right. One can forecast here both demand and supply with some degree of accuracy. Again the Government can decide what level of resources they are going to make available for education in 1970—but do not let us imagine that we can now predict, at all accurately, the demand for education in that year. The Robbins prediction of the proportion of the university age group with minimum qualifications for university entry became out of date within a year. These predictions become out of date very quickly. As for the idea that we can forecast the demand for hosiery and knitwear in 1970, or for any consumer goods where fashion changes very rapidly, this is just absurd. I do also agree with those who have said that it cannot be right to produce figures that are more precise the further one gets

from the present. I hope that the right hon. Gentleman will bear in mind the point that has been made in the Economist that there should be a statement in the Budget from now onwards, of the annual expansion figure that is implied in the Budget Estimate, and that this should be included in the Budget speech.
A more serious criticism is that the National Plan gives no indication of the scale of change that is going to be needed if the British economy is to grow significantly faster. There is obviously going to be a need for a massive redeployment and retraining of Britain's skilled labour force during the next few years. Surely our policy document must be right in the emphasis it lays on modernisation and on mobility—for instance, in the need to work out a scheme for transferability of pension rights? Again if the concept of "democratic planning" means anything, surely it should mean the Government confronting the country with a series of options setting before it some of the real social choices which face this country.
We are rightly told by Mr. Catherwood of the right hon. Gentleman's Department that in many industries American output per head is between two and three times the output per head in this country. What would be the effect on growth of a rapid removal of restrictive practices in industry? That is the sort of question which public opinion should be encouraged to discuss.
These are all serious criticisms, but even so I should not myself go so far as the economist who wrote recently that
the cure for bad planning of this type is not better planning but no planning".
I believe that it will be a very great pity if as a result of this document planning becomes too much identified in people's minds with this overall indicative target of a 25 per cent increase in national output between 1964 and 1970. It seems to me that the value of indicative planning lies not so much in these overall targets, but rather in more limited exercises by those important sectors of industry where an overspill of demand can add sharply to the strain on our balance of payments.
Take a topical instance which has been referred to by several hon. Members in the debate, including the hon. Members


for Birkenhead (Mr. Dell) and King's Lynn, namely, chemicals. The output of chemicals is dependent on the level of investment in the chemical industry, which is itself bound up with the capacity of the chemical enginering industry. If, as at present, plant makers cannot meet the investment orders of the chemical industry, the result is £30 million worth of chemical imports for which we should have capacity in this country.
It is obviously right there should be organised and mutual discussion in certain key sectors of industry to prevent this sort of situation from arising. To me, this is a much more useful concept of planning than too much preoccupation with a single indicative target selected as a political decision. I agree with hon. Members who have emphasised the importance of devoting increased resources to ports. I also believe that a country with a balance of payments problem, compelled, as we are, to damp down demand from time to time, will always tend in the absence of planning to have an uneven growth of capacity, because every downturn makes plant manufacturers more doubtful about expanding their economy when the upturn comes. It is this uneven growth which causes a shortage of basic capacity in certain industries just when it is most needed.
I remember M. Massé, head of the French Commissariat, saying at a conference which I attended that the object of planning is to handle short-term fluctuations in such a way that they do not result in long-term weaknesses.

Mr. George Brown: Hear, hear.

Sir E. Boyle: With respect, I believe this is a much more useful definition of the objective of planning than some of the things that the right hon. Gentleman was talking about in his speech. I believe that this should be our approach. As part of our economic strategy for breaking out of the stop-go cycle and preparing ourselves to enter Europe, which the hon. Member for Caithness and Sutherland (Mr. George Y. Mackie) rightly mentioned, we should encourage key sectors of British industry to plan together and to plan for success.
The advantage of this approach to planning is that it is wholly consistent with

the emphasis which we on this side of the House would want to lay on individual enterprise and on consent. We believe that wisely directed State intervention should never suppress individual enterprise and initiative but should always aim to make it easier for productive industry to meet the nation's needs.
The right relation between the State and industry was very well stated by Lord Keynes in a passage in his famous essay called "The end of laissez-faire". He said:
I believe that the cure for [the miseries of business depressions] is partly to be sought in the deliberate control of currency and of credit … and partly in the collection and dissemination on a great scale of data relating to the business situation. These measures would involve society in exercising directive intelligence through some appropriate organ of action over many of the inner intricacies of private business, yet it would leave private initiative and enterprise unhindered.
The whole of that sentence is a very good description of the concept of planning which I would support.
One other point which I wish to mention was referred to by the hon. Member for Middlesbrough, West (Dr. Bray). I believe we should think a good deal more about this House and economic planning, and how we can build an institutional framework which can ensure that those concerned with economic intervention can become a little more exposed to public opinion. I was disappointed with the Leader of the House for being quite so negative on the issue of specialist committees. We never thought of the right hon. Gentleman as a dangerous radical, but he seemed to go beyond what was reasonable in resisting all new ideas. Surely, to use the expressive words used by the Prime Minister in one of his speeches, there must be more opportunity for this House to "reach out" to the Executive. As a start, there is certainly a strong case at least for a specialist Select Committee on Science and Technology on the lines of the existing Select Committee on Nationalised Industries.
Last and most important of all, let us always remember that planning, although it can aid decision-taking, can never be a substitute for taking the right decisions here and now. On this point, the hon. Member for Middlesbrough, West used a sentence which I should like to quote with agreement. He said that "Most


important to us now is what we do with the economy now and not in 1970. What happens in 1970 is important and has to be given full weight, but only in so far as it helps us to decide what to do now."
Although it has not been mentioned much today, there is no doubt what is the most worrying trend at the moment. The Chancellor of the Exchequer expressed it in his speech the other day. During the first eight months of the year, we had an 8 per cent. rise in earnings coupled with a slight fall in industrial production. This is a serious situation because the prospects for growth must depend upon a reasonable moderation in the growth of incomes.
As the National Plan itself states,
Planning for economic growth requires policies for price stability and for the orderly growth of money incomes. An attack on the problem of costs is one of the essential measures if our competitive position is to be improved, and the balance of payments strengthened.
Those words appear in a Plan prepared and presented by the Government. The whole Government must be seen to support them. We cannot expect industry to back up the Government if Ministers either separate themselves visibly from their colleagues during critical debates, or talk in a way that suggest that they would like to opt out of the Government's policy in their own spheres. I hope that the Minister of State will make it plain that the Government intend to use the period immediately ahead, when the pressure of demand is lessening, to use all the influence they can to moderate the upward climb of incomes. Otherwise, we have no hope of securing that steady rate of increase in exports which is essential to the expansion that we want in our economy as a whole.
What we need in Britain today is not just a plan. I have explained to the First Secretary what I believe the proper concept of planning to be. What we want, however, is not simply a plan, but an economic policy dedicated to growth and to the pursuit of competitive efficiency. We on this side want these things for the sake of the rewards they will bring: a fuller life for individuals, public services worthy of the nation and, not least, an increased ability to aid those other nations which are less fortunate than ourselves.

9.28 p.m.

The Minister of State, Department of Economic Affairs (Mr. Austen Albu): When we learned that the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) was to wind up the debate for the Opposition, we thought that for the time being he had won the battle which has been going on in the party opposite on economic planning, which they once tried to make dirty words. In one part of his speech, when he was giving a definition of economic planning in a society like ours, I do not think that my right hon. and hon. Friends would have disagreed very much with the right hon. Gentleman. After listening, however, to the speeches of the right hon. Member for Enfield, West (Mr. Iain Macleod) and some of the extraordinary backwoodsmen's speeches made from his own back benches, I am afraid that he still has a long way to go.
The right hon. Member for Enfield, West even conjured up the most horrifying stories of the controls and restriction that inevitably follow any attempt to plan the economy of a country like ours for economic growth. The right hon. Gentleman's views most resemble the views expressed by the then Mr. Winston Churchill in such alarming fashion during the 1945 General Election, the result of which is well known to the party opposite. They are not strictly Conservative views so much as nineteenth century Liberal views. It was their application to our economic affairs which led to the disillusionment of the working class with the Liberal Party and to the growth of the Labour Party. However, I would say to the right hon. Gentleman the Member for Handsworth that I am sure he will have plenty of time and find plenty of evidence to support his views in favour of Government planning, and I can only hope that during that time he will succeed in converting the remainder of his colleagues.
The right hon. Gentleman's speech has been described by two of my hon. Friends as schizophrenic. It may, perhaps, be rather better described as an exercise in militant indecision. I do not blame him for this because he is, of course, in a very difficult position. He started with an attack on the basis of the figures which we obtained from industry and the method of obtaining them. One or two hon.


Members have referred to the fact that we asked industry to predicate their estimates of their future activities on the basis of a growth rate of 25 per cent. over the planning period. I do not know how one is to conduct this exercise unless, having done a careful calculation based on past trends and on the best estimates one can make of the future, one tells industry what is really a reasonable target at which to aim, and this is, after all, what we did.
I noticed that both right hon. Gentlemen called in aid Professor Alan Day. They called in aid his first article. Neither right hon. Gentleman quoted the second article, and perhaps I may be allowed to quote from it. Speaking about the people who reply to the pollsters, he said on 24th October that
most of them do know that the country was in a major financial mess and that in the last couple of months a great deal of that mess has been straightened out …. The plan itself may—for all its shortcomings—have contributed significantly to the business confidence which is now maintaining investment plans despite all the troubles we have been through in the past 12 months. Discussing the plan must have drawn the attention of business men to horizons more distant than the prospects for the next year or so.
This is the whole object of having figures for the end of the planning period, although business men are concerned more with the more immediate years. Professor Day went on:
Even if demand for some products should dip for a time, it is pretty certain to recover again and the general trend is upwards. Investments planned now will come to fruition well after the present 'stop' phase is over.
This, of course, is the exact purpose of having a plan at all.
One question which has been raised is whether business men answering the industrial inquiry which asks them for their estimates took account of the measures of restriction which the Government were forced to introduce. The dialogue with industry took place after the April Budget, I admit, but before the July one, but, as hon. Gentlemen know, the investment surveys of the Board of Trade and the C.B.I., taken after July, showed that industry has made no change in its investment projects.
One, perhaps, tenable point which the right hon. Gentleman the Member for Enfield, West, made was when he referred

to the prospective expenditure on education. He asked a question about teachers' salaries. I think the right hon. Gentleman failed to recognise that all the figures in the Plan are figures based on constant prices. They are, of course, figures of the use of resources, or of consumption, whichever way one likes to put it, and, of course, teachers will benefit, as well as everybody else, from the rise in personal consumption which the Plan predicates.
Of course, we all recognise that the prime object of our economic policy at the present time must be to reduce and in fact reverse the deficit in our overall balance of payments and repay those debts which those deficits over a number of years have caused us to incur. I say "a number of years" because we are dealing not with just last year's £800 million balance of payments deficit. The truth is that this deficit was only the last and the largest in a series incurred during last ten years, during which the identified overall deficit ranged between £1,300 million and £1,400 million. It is true that these figures are subject to some adjustment by virtue of unrecorded current and capital credits which form part of the so-called balancing item, but the larger part had to be covered by short-term movements into London of money, whether in the form of loans or foreign-held sterling balances. Moreover, there were clear signs that with successive cycles of good and bad years we were on average getting deeper into deficit.
Right hon. Gentlemen opposite frequently boast about the increase in well-being which occurred under their rule and were not above fighting the 1959 election on the slogan, "You've never had it so good", when they knew that we had a deficit of £119 million which was followed by an even heavier one in 1960. They never tell the people of this country that during those years they were borrowing short-term from overseas and thereby putting our economy into an increasingly unstable position.
I sometimes wonder whether they knew what was going on, and I doubt whether they know even today. If they did, the right hon. Member for Enfield, West could not make large promises to the electorate about reductions in taxation, which, as far as I can see, are to be paid for by increasing the cost of living and of our manufactures, and this at a time


when we are doing everything we can to make our manufactures more competitive and so improve our balance of payments position. Nor should they give hints, as they have done, that they will remove restrictions on overseas investment without any consideration for the condition of our overseas accounts. By doing this they are only making the task of our manufacturers in trying to improve the balance of trade a Sisyphean task. It is impossible, if we go on increasing Government expenditure and investment overseas, to expect the manufacturers of this country to make up for it by continually having to increase exports at a rate which will be impossible to achieve. If right hon. Gentlemen are not making these promises out of ignorance, they are thoroughly irresponsible.
What we are now doing is starting on the hard path of reversing the economic trend of the years since the war or, to be fair, many years before. We are trying to put ourselves in the position where if we spend or lend or invest money overseas, we do it out of money earned and not out of money borrowed. To make these changes is not something that can be achieved overnight or even in the comparatively short period of one year. As an engineer I know that a machine with a heavy inertia takes a considerable time to accelerate up to full speed, especially after one has had to apply the brakes to prevent it running away.
Hon. Gentlemen opposite talk about the social services and the great rate at which they were increasing them. This is one of the troubles. They had started such an enormous increase in public expenditure last year that we were put into an extremely difficult position this year in bringing it under control, and this was the responsibility very largely of the right hon. Member for Barnet (Mr. Maudling).

Mr. Reginald Eyre: Would not the hon. Gentleman agree that the difference between the Labour Party and Conservative Party Manifestoes at the last General Election was that the Labour Party promised greater expenditure on education, housing, and so on, and as a result of that the rest of the world, knowing that the economy could not bear the pressure of devaluation which would follow, caused the movement away of sterling? Is not the—

Mr. Speaker: Order. Interventions must be brief.

Mr. Albu: The hon. Gentleman's statement is completely untrue. We said that we would have to cost any public expenditure, but we were not responsible for the economy at that time. The vast increase in the rate of public expenditure which we found on coming into office was the direct responsibility of the Government of that time.
I would not deny that the tools for the job of controlling the economy are limited, and that to some extent we have had to use the same ones as our predecessors did, but we have used them more selectively. Nevertheless, I assure the House that we are forging new ones, and in case the more nervous Members of the party opposite get frightened, let me assure them that this will not involve anybody being sent to whatever is the British equivalent of Siberia.
The carrying out of economic plans in a democratic society, subject for the major part of its economy both at home and abroad to the demands of the market, can only be carried out with the fullest co-operation of both sides of industry, and even the direct governmental measures are best discussed first at home with those whom they will affect, and this we are doing. Luckily we have very good industrial support, which the Leader of the Opposition has learnt to his cost in recent months.
Frankly, we are very gratified at the reception which the Plan has had in industry. I know from personal discussions with industrialists and managers that they like the idea of an objective for the economy as a whole and particularly objectives against which they can measure their own performance. But however much support we receive from industry and however close our collaboration, this does not relieve the Government of the necessity for taking direct action wherever necessary—and the Government control about 45 per cent. of capital investment in the economy, and 25 per cent. of the employment.
The right hon. Member for Enfield, West attacked the idea of any controls at all, although at the end of his speech he implied that we should have to put some control on a possible upsurge of imports during a boom period. If he


did not mean that I do not know what his reference meant at all. But his speech was so unclear in any case that that is not surprising. I do not know what he would do if this should take place.
The right hon. Member for Handsworth asked whether we should try to shape our economy. If we did not try to do this I do not know whether we should get the growth that he and I agree it is the task of Government to try to achieve. His own Government carried out the rationalisation of the aircraft industry and the cotton industry, and they had a policy for agriculture which obviously affected the development of agriculture. Obviously, we have had to do the same sort of thing. Is it wrong to have selective controls on buildings? Incidentally, the right hon. Gentleman must not think that we build schools and houses with milk or school meals. This is dealing with the question in money terms and not in terms of real resources, which is rather beneath the right hon. Gentleman, because most of his argument was very interesting.
I cannot understand the attitude of the Opposition which, while welcoming the Plan in theory—

Sir E. Boyle: On the point of universities and colleges versus milk, the worry from the point of view of any Chancellor must be the rate of climb of recurrent expenditure. Social capital expenditure is always controlled largely because of its consequential effect upon recurrent expenditure. Therefore a tighter control on some less essential aspects of recurrent expenditure must have other effects as well. It makes it possible to afford a higher level of university and technical college building.

Mr. Albu: That is a highly technical point. I still maintain that we do not build houses out of milk. I cannot understand the attitude of those hon. Members opposite who welcome the Plan—or presumably they welcome it, because they will not vote against it—and yet are unwilling to accept any Government action which is taken to ensure that it is successful. That seems to be the right hon. Gentleman's point of view. I was not sure whether or not he supported the idea of planning.
A particular example is to be found in housing. This is not only a very important social service but a large consumer of our economic resources. Housing is a very good example of what happens in a mixed economy. Part of it is under the control of local government and local authorities and part is entirely within the sphere of private enterprise.
Because my right hon. Friend the Minister of Housing and Local Government discussed with the building societies methods of ensuring a correct balance between public and private housing, within an overall target, he is violently attacked. If the Opposition do not believe it right to fix a target for the number of houses built in a year, and to allocate it as between public and private enterprise, how can they expect anybody to believe in the genuineness of their late conversion to economic planning?
The right hon. Member for Handsworth rightly said that a large part of the objective in economic policy and planning is to control the economy in the short-term for long-term objectives. None of us would disagree with that. The current state of the economy is now in the first year of the Plan. On the whole we have hardly had time to get our long-term measures into operation. Let us look at the position.
I want to deal first with the external position. As the right hon. Gentleman said, we have succeeded in restoring confidence in the £, so that today it stands at a higher level in relation to the dollar than at any time during the last two years. It looks as if, in the present year, our balance of payments deficit will be halved, and we hope to get into balance next year. This could not have been achieved unless we had operated on capital account and unless our exports had risen substantially and we had been able to hold back the accelerating rise of imports in the last few years. The value of our exports in the first nine months of the year was about 6½ per cent. higher than in the same nine months last year. The volume has been a little over 4 per cent. higher and was rising strongly between the second and third quarters of the year. They are expected to continue to rise quite strongly and there is no reason why they should not reach, and even exceed, the Plan figure of 5¼ per cent. annual increase, provided that there


is a continuing major effort in the export market.
Obviously, the balance of payments benefited by the higher prices which are now being obtained for some of our exports and it looks as if exporting may now be more profitable, which may increase the attractiveness of exporting for some firms. The value of imports hardly rose at all and there is no doubt that this was helped by the surcharge. We hope that the volume of imports will not rise any more this year. By that time, the work which is being done in the little "Neddies" to improve the import-export balances of these industries, and to which the right hon. Member for Handsworth paid credit, should begin to have effect.
I am not sure whether right hon. Gentlemen opposite are pleased or sorry that the rather gloomy promises made in the early part of the year of mass unemployment by the end of the year are shown to be completely false. One of the interesting features of the present situation is that the regions of above average unemployment and slow growth are generally in a more healthy position than when we took over. Our policies of tightening I.D.C. control in congested areas and, most important, exempting those areas from the July restrictions, are effective now and will have their impact when they are most needed, over the next 18 months.
We are, at present, reviewing distribution of industry policy and planning in advance for the employment changes which the National Plan has forecast. The White Paper on Energy Policy and the Plan make clear our intentions to see that pit closures take place without any unnecessary hardship. Already there are signs that the regional economies are responding to our measures. The falling off in business confidence in the less prosperous regions which followed from the last Government's "stop-go" policies has not occurred this year. The number of approvals for new factory building in the less prosperous regions is significantly higher this year than it was at the corresponding point of the business cycle in 1961.
Over all, there are many signs that manufacturers have decided to maintain a steady level of investment instead of reducing their investment plans at the first sign of any slackening in the rate

of economic expansion. This is extremely important, because the achievement of the Plan is dependent on maintaining a steady and high level of investment. Steady instead of fluctuating rates of investment will make the task of controlling the economy all over the country—and especially in the less prosperous regions—very much easier.
Not surprisingly, there has been some reference to rises in prices and incomes which have been taking place during the year. This is not a new phenomenon and I do not pretend that our new policies have yet had time to be successful. Prices have been rising and money incomes outstripping real output since the end of the war. They were both rising very rapidly when the present Government took office—

Sir C. Osborne: May I ask a question?

Mr. Albu: No, I think that I had better get on—[Interruption.] I thank the right hon. Gentleman. As this is the first time that I have answered from the Box, I took precautions to protect myself. I hope that I am replying to the debate.
We have never denied that two-fifths of this rise was accounted for by the Government's measures to deal with the difficult economic situation which they inherited. They were intended to reduce consumers' expenditure and in this they seem to have been successful, because in the first half of the year consumers' expenditure was virtually unchanged from the level reached in the fourth quarter of 1964. There are signs, too, that we are now in for a period of relatively stable prices and I have no doubt that, among other factors, the existence of the National Board for Prices and Incomes has played its part.
As to wages and earnings, there have been a number of unusual circumstances, the main one being that we have been through a cycle of reductions in normal working hours, which have accompanied the usual run of high wage increases. It is clear that the present increases are very much above the norm of 3½ per cent. which is justified on consideration of the long-term rise in productivity.
However, it would be quite wrong to assume from these figures that this agreed policy is or is likely to be ineffective.


After all, it is just six months since the White Paper was endorsed by a national conference of trade union executives and carried by an overwhelming majority. This is far too short a period on which to base any judgment of the success of a policy which, in itself, involves a revolutionary change of attitude. Nevertheless, there are many encouraging signs that these changes have taken place, particularly perhaps the agreement of the T.U.C. to operate its own early warning system, which demonstrates, I believe, an extraordinary and very welcome change of attitude on the part of the trade unions.
No one who criticises this policy has yet suggested an acceptable alternative, and I believe that more and more people are beginning to realise that if national productivity rises at, say 3 or 3½ per cent., then it is literally impossible for spending power to rise any faster and there is not much point in trying to raise one's money income at a much faster rate.

Sir C. Osborne: Since the success of this scheme depends largely upon restraint in incomes, why should this scheme succeed when under Sir Stafford Cripps it completely failed in 1948 and 1949?

Mr. Albu: We have to see. But I have already explained that some revolutionary changes of attitude have taken place in the trade unions and the Trades Union Congress. This is the first time that they have put their hands to such an agreement and the first time that they have themselves been willing to undertake the early warning system which my right hon. Friend is introducing.
I note that some unions put the emphasis more on productivity than on wages policy. Of course productivity is the real answer to all our problems, and the Plan makes this very clear. In fact, unless we have increased productivity we shall not have the manpower needed to achieve the growth target. There is a general belief that a determined attack on the inefficient use of labour in our factories could produce the equivalent of at least 10 or 15 per cent. more workers. Such an attack must involve many changes in traditional methods and habits of work, and I freely admit that these

are suitable subjects for collective bargaining on the shop floor, and in fact account was taken of them in the White Paper on Prices and Incomes Policy.
In recent months there have been many agreements reported between management and trade unions—and many, I am sure, which were not reported—in many different industries which allow for the more effective use of labour. We are very anxious to encourage negotiations of this kind in every possible way and to stimulate management in industry further to take the necessary initiative. Apart from the better-known work arising out of the proposals of the Devlin Committee on the docks and the inquiry into industrial relations in the motor-car industry, many of the little "Neddies" are examining these problems themselves. The national shortage of skilled workers is much more severe a problem than the very small total shortage of workers thrown up by the projections of the Plan.
Obviously the main responsibility for remedying this shortage lies in industry itself, particularly through the industrial training boards, which are now getting into their stride and are beginning to have a real impact. To some extent this is the answer to my hon. Friend the Member for Hitchin (Mrs. Shirley Williams), who made such an extremely clear and brief speech, which contained a good deal of information. But the Government are doing their share with the programme of expansion of Government training centres. To meet the growing demand for competent instructors in industry the Ministry of Labour are increasing the capacity of their colleges at Letchworth and Hillingdon.
I know that those who come out of these centres are not equally welcome in industry in all parts of the country. But the Plan makes it clear that in some industries there is likely to be a fairly rapid decline in their manpower, and we are determined that wherever this happens alternative employment will be provided. Our regional policies, and particularly the active work of the Board of Trade, are designed to this end. It would be a tragedy if out-of-date fears were to prevent the training of those workers on whom alternative employment for many others depends and if they prevented their acceptance in industries which so badly need them.
The right hon. Member for Enfield, West expressed the opinion that the Plan inhibited change. I do not agree. I do not see how we shall get this sort of change unless the Government take action and unless there is some plan which forecasts the need for the change in workers required and gives a target to aim at for retraining. That is exactly what the Plan does.

Mr. Iain Macleod: Would the Minister of State answer the direct question which I put to him and which has been repeated in at least three speeches? Will there be new figures, will the new figures carry the Plan till 1971 and will it be based on a new questionnaire?

Mr. Albu: There will not be a new questionnaire in the immediate future. Obviously we will look at the figures from year to year. The House will want to do that. That will have to be done if we need to adjust Government policy in the light of what is happening. That is what the right hon. Member for Handsworth asked us to do. He asked us to take short-term policies to achieve the long-term Plan. Obviously that will be done in relation to the whole of the policy so that afterwards we can bring the Plan forward.
This is the first debate we have had on the National Plan. We welcome the remarks of some of my hon. Friends as well as those of the right hon. Member for Handsworth. I think I can say—and perhaps this is indicative of the situation—that we have had many more informed speeches from this side of the House than from the benches opposite. We hope that this debate is only the first of many, for the more constructive criticism both of the Plan itself and of the measures which we are taking to carry it out, the better we shall be pleased.
We are well aware of the deficiencies of this, our first, Plan, but as my right hon. Friend has said, we shall adjust its details in the light of events and we are hard at work in improving the statistical techniques on which it is based. In reply to the hon. Member for Worthing (Mr. Higgins) and my hon. Friend the Member for Middlesbrough, West (Dr. Bray) in regard to the use of input/output analysis statistics, I assure them that had we included all the figures in the

Plan it would have been a much larger document than it is and the vast majority of people would not have been able to have understood it. We are using all these modern techniques and we shall continue to do so, because out-of-date statistics must be brought up-to-date to be useful.

Mr. Higgins: Is the Minister aware that unless the tables are published we can have no idea whether or not the Plan adds up?

Mr. Albu: I assure the hon. Gentleman that it does. [Interruption.] I assure the House that the exercise has been done.
Discussion of the Plan cannot be confined to Parliament and I am glad to say that it is taking place increasingly in industry. Companies and professional bodies are beginning to call conferences, to which Ministers are invited, so that their managers and representatives of their workers and trade unions can learn of the implications of the Plan and discuss them for themselves. These conferences are a very good idea and I hope that they will be widely taken up. We shall never succeed in curing our economic ills unless everyone realises his or her own responsibility.
We believe, and we are widely supported in this belief, that the Plan is giving confidence to industry—to managers to maintain their investment and to workers to co-operate in changes in traditional methods. I think I can claim that we have, during the last year, established a new and fruitful relationship with industry—through our Department with its Industrial Division, through the increasing activities of the Board of Trade in encouraging exports, through the new work of the Ministry of Technology and through the work of the N.E.D.C. and the E.D.C.s.
Those who support the Plan have put their backs to the task of finally getting this country out of the debilitating situation in which it has been since the end of the war. None of us can feel happy about a situation in which our economy remains poised on a knife-edge. If we are to play our full part in the world, it will only be done on the basis of economic strength on which alone can be based economic and political independence.
Moreover, the social policies to which my hon. and right hon. Friends have devoted their lives are dependent on the Plan's success. It is a Plan not only to raise our national wealth but also to ensure that its distribution takes place in accordance with fair and just social priorities. The Motion is to welcome the Plan. I gather that hon. and right hon. Gentlemen opposite will support us.

Question put and agreed to.

Resolved,
That this House welcomes the National Plan (Command Paper No. 2764).

CONTROL OF OFFICE AND INDUSTRIAL DEVELOPMENT

9.59 p.m.

The Minister of State, Board of Trade (Mr. George Darling): I beg to move,
That the Control of Office Development (Designation of Areas) Order 1965 (S.I., 1965, No. 1564), dated 9th August, 1965, a copy of which was laid before this House on 13th August, be approved.
The effect of the Order is to apply office control with effect from 14th August in the Birmingham conurbation. This means that applications for planning permission made on or after that date for office developments in excess of 3,000 sq. ft. must be accompanied by an office development permit.
The Order is not retrospective before 14th August in the case of planning applications made or planning permissions granted before that date for office projects in excess of the exemption limit. The Order, as is provided for in the Act, came into immediate effect on the day following the date on which it was laid before Parliament. This, as the hon. Member for Reading (Mr. Peter Emery) knows very well, was necessary in order to prevent forestalling. Hon. Members will remember that we discussed this point fully in Committee. For the same reason, in view of the Chancellor's announcement on 27th July of the decision to extend the control to Birmingham, it was necessary to make the Order as soon as possible after the Bill received the Royal Assent on 5th August, the last day before the Summer Recess.
The House will recollect that the Government's decision to control office

development in the Birmingham conurbation was announced by the Chancellor in his July package of measures to improve the balance of payments. Those measures, which were widely approved, were designed to restrain less essential building and to reduce the general pressure of demand on the economy. In the private sector building control was announced, and the office control was extended to Birmingham. At the same time I.D.C. control was tightened in the Midlands and other congested areas. These new controls will undoubtedly help to achieve the Government's long-term objective of a better distribution of employment as between the over-congested areas and those which are under-employed.
Here we are dealing with what is clearly an over-congested area, and indeed the congestion is getting worse. There are very serious labour, housing and transport problems in the Birmingham area. In July unemployment was below 1 per cent., which puts the Midlands on a par with London and the South-East in terms of very high pressure of demand. The Government, therefore, thought it timely to take steps to control the growth of office accommodation in Birmingham and the rest of the Birmingham conurbation before it got out of hand, in the same way as they control the growth of industrial employment.
I should like to give figures to show the threatening situation which must be faced. In the conurbation the population has increased at a higher rate than the national average for several decades. Employment has grown even faster. Between 1953 and 1964 total employment increased by 170,000 and now stands at nearly 1¼ million. While manufacturing employment increased by 10 per cent. in this period, service employment increased by 27 per cent., a faster rate of growth than in any other region; and of course it was concentrated in the Birmingham conurbation.
A really serious situation has developed because there are not enough qualified and trainee office workers to meet the demand and there seems to be little prospect of improvement. The continued shortage of labour of all kinds, including office workers, has kept unemployment as low as 0·6 per cent. in the City of Birmingham and surrounding


areas for each of the past five years. The situation there is very similar to that in Greater London.
At the end of 1964 the amount of commercial office space in the conurbation was estimated at 13½ million sq. ft. Office space increased between 1951 and 1963 in Birmingham alone by nearly 3 million sq. ft., after allowing for the demolition of about 1 million sq. ft. We now have to face a situation where there are some 3 million sq. ft. of new office space in the pipeline—a further potential increase of 23 per cent. This represents a potential additional labour demand for well over 20,000 office workers—two and a half times the present number of unemployed, and most of this is concentrated in Birmingham and Solihull.
The growth of employment generally and the prospect of further substantial increases in office employment threatens serious consequences, not least in transport congestion. Transport capacity is severely strained, particularly in Birmingham, as anyone who has tried to drive through the city at the peak hour knows very well. Housing is another desperate problem. Despite the immense efforts of the local authorities and private builders, housing has not kept pace with the rise in the population, and it is estimated that over the next 16 years, that is, to 1981, about 340,000 houses will be needed. Not all of these can be accommodated in the conurbation itself, although some relief will be secured by redevelopment within the city and on its fringes. Overspill arrangements will help. Arrangements already made include the new towns of Dawley and Redditch and smaller schemes elsewhere. But these will not be enough. Sites will still have to be found for at least another 50,000 houses in addition to the arrangements already made.
It will be no help to the overspill of population to allow uncontrolled growth of office employment in Birmingham itself and the rest of the conurbation, and it would be manifestly unfair to industry in the conurbation, which is already subject to I.D.C. control and which is expected to provide jobs for the overspill towns, if office employment also did not contribute its share to the redistribution of development. Moreover, the continued growth of the conurbation is a threat to the economic balance of the region. Already half

the population of the West Midlands lives in the Birmingham conurbation.
The Government had all these problems in mind in deciding on the control of office development in this area. We believe—I do not imagine that hon. Members opposite will quarrel with this—that the conurbation is the right area to choose for this control. It is the focus of the West Midlands region, with a population of nearly 2½ million and a large and well diversified industrial base. It is impossible to distinguish between the Birmingham city area and the immediately adjacent towns. The whole conurbation must be regarded as a catchment area from which to obtain office projects for places which have a need for new employment, including, of course, the overspill towns.
In the initial stages, the Board of Trade will subject all applications, therefore, to tough scrutiny. To quote the criteria which we have laid down for office control in the Metropolitan region, applicants will have to satisfy the Board that the proposed activity cannot be carried on elsewhere; that there is no reasonable alternative accommodation; and, unless the project is so small as not materially to add to congestion or to the demand for labour, that the activity is in the public interest. These are the same criteria as we are applying to applications for office development permits in the Metropolitan region.
This control of office development will be applied to any Government offices in the Birmingham conurbation in just the same way as it will be applied to private development.
For these reasons, I am sure that the House will approve the Order, although I imagine that there will be some questions to be asked on the detail of it.

10.10 p.m.

Mr. Peter Emery: No one, least of all the Minister, would want to minimise the effect that the Statutory Instrument will have on a major area of industrial Britain. Having done a rather complicated sum, I find that it covers over 166,000 acres, with a rateable value of something over £110 million in the area that is listed in the Schedule to the Order. To be fair, it is only because of the action of the Opposition when the Bill was going through the House and in Committee that the Government are forced to


bring forward the Order today. An affirmative procedure has been established for this sort of Order which was not in the Bill when it was originally published, and it is one of the ways in which the Government met the point from the Opposition that it should be an affirmative Resolution rather than the more nondescript negative Resolution.
I know that my colleagues from the Birmingham constituencies who are represented here this evening share my wish to underline the statement made both by the Minister of State and by his right hon. Friend the President of the Board of Trade. The control of office building does not in itself mean that there will be any more houses or homes. I am certain that no one either on the Government side or our side would want it to be thought that, because of the Order, automatically more houses and homes will be created for the large number of people who are on the housing waiting lists in the areas of the Birmingham conurbation.
As the Minister rightly said, there are a number of questions which must be put to him. In the Schedule of areas designated by the Order, there are 24 local authorities covered, involving an area of 166,000 acres. Is it necessary to be as wide as that? I am not trying to make a political point, but we on our side often say that the Government are too inclined to have control for control's sake, and I wonder if it is necessary, for example, to take in Amblecote or Stourbridge. If one looks at the map, it makes a nice round circle, but it could not be called a designated area, because it is simply a number of local authority areas. In answering our point, I hope that the Minister will make two things plain. First of all, will he say that it is only local authority areas and, secondly, will he say why the area has to be so wide in the Birmingham conurbation?
Then I should like the Minister to tell the people of Birmingham what will be the position when the Boundary Commission makes recommendations which may, by Resolution of the House, become new boundaries, and how that will affect the areas mentioned in the Statutory Instrument. The re-organisation of boundaries must raise queries in the minds of residents about whether the new areas will be so designated. If they are not

exact to the geographical area of the present Statutory Instrument, what is the position? We would all admit that that was not considered when the Measure was going through this House, and it is only now becoming apparent, and, therefore, I think it right and proper that we should have an answer.
Will the Minister make plain—I believe that it is definite—that there can be no retrospection in the Statutory Instrument as there was retrospection in the Act. In the original Bill there was this element of retrospection. I have had one inquiry about whether there is any possibility of retrospection before 14th August or 9th August, when the Order was made. I have told the inquirer that in my view there cannot be and that the Act makes that plain. However, it would be helpful if people in Birmingham could be told that this is indeed the case.
I turn to the three criteria mentioned by the Minister. If one analyses what he said, the three criteria are covered completely and utterly by the last of his three points—that is, what the Board of Trade or its officers consider to be in the public interest. I am always wary when executive authority is given to Governments so that they, rather than this House, can interpret what is in the public interest. We have not heard from the Minister any aspect about approvals for office development permits being given for modernisation. There must be many factories and plants within the designated area which have a considerable need for modernisation of their office buildings. I should like the Minister to make plain that where a business applies for an office development permit in order to modernise the office buildings, not necessarily to creat new buildings, and perhaps where it is merely complying with the generally approved requirements of the Offices, Shops and Railway Premises Act, 1963, approval will be given.
I would ask the Minister to bear in mind that the requirements of the Statutory Instrument may entail considerable elements of hardship for people who have purchased property for the purpose of proceeding in a normal, reasonable business manner. Frequently in Committee we said that people had a right to make business judgments seeing the course in front of


them, but if the Government altered the rules in the middle of the race and perhaps put in another fence, considerable hardship might be caused. I ask the hon. Gentleman to say not necessarily that every one will be granted but that they will be seriously considered on the criterion of hardship.
How many applications have been made since 14th August, when this Order was laid? How have they been dealt with? Will the hon. Gentleman undertake that those who have been waiting on a decision since then will receive it perhaps within the next 14 days? This is not too much to ask. I cannot believe that many applications are involved and, after all, the Board of Trade has had since 14th August to consider them.
The Minister should make plain what consultation he had with the 24 local authorities affected before the Order was laid. It is nonsense for the Government to suggest that more responsibility should be placed in the hands of local authorities if, the moment the Government want to do anything, they do it off their own bat without consulting the local authorities. The information I have is that the local authorities were not consulted before the Order was laid.
I do not claim that automatically the Government must take the views of the local authorities in every case because, of course, they must consider the overall position. Indeed, I hope that the Government really are considering the overall position of the country. I did not like the phrase used by the hon. Member when he talked about the economic balance of a region. If there is to be economic balance it should be the economic balance

of the country as a whole. If we are to have economic balance at every Board of Trade region we shall be in a madness of planning. That is not our concept of planning. We believe that we must obtain the proper economic balance of the whole country. This strengthens the argument that when these matters are being considered by the Board of Trade there is every need for consultation with the local authorities.
We believe that we must do all in our power to ensure that Birmingham remains the prosperous centre of industry and exports which it has built up. It could be argued that some parts of the Order will be restricted, but I do not believe that that will necessarily be the case if it is properly administered. However, it is essential that there should be no restrictions on Birmingham so that Birmingham can remain as efficient as is humanly possible. Office development may be required for modernisation, increasing exports, or for ensuring that the people already employed in the area—not new people coming into it—can do their jobs more efficiently and more effectively. We must make certain that management has the necessary facilities and the necessary buildings to do its job, but that the availability of housing in the Birmingham area is not decreased.
If we have the assurances and answers for which I have asked—I know that some Birmingham Members have some questions and I believe that my hon. Friend the Member for Crosby (Mr. Graham Page) has some legal issues to put—we on this side of the House will be only too pleased to see this Statutory Instrument become law.

10.27 p.m.

Mr. Harold Gurden: My hon. Friend the Member for Reading (Mr. Peter Emery) is right and wise to point out that the Order will not help the housing situation in Birmingham—so it seems from the evidence which we have. In his letter to the Town Clerk of Birmingham as late as last July, the Minister of Housing himself pointed out that such an order would not help the housing situation.
What is to happen to the cleared sites in Birmingham for which office building was planned? Will houses and flats now be built on them? There are several such sites in Birmingham and they obviously cannot remain void and presumably something will be done about them by the local authority. The Minister spoke about the heavy demand for office accommodation in Birmingham which there would be. I did not know whether he was foreseeing an expansion of demand. The greatest demand for office accommodation in Birmingham at the moment comes from Government Departments which are taking up vacant offices in the city. If we are to restrict demand, we ought to consider the amount of accommodation which those Departments are taking.
The Minister spoke of the prosperity and growth of the Birmingham area. If our earlier debate today is to mean anything, we ought to be grateful for the prosperity of the Midlands, certainly in Birmingham and the surrounding areas, and make sure that we do not put industries into difficulty by over-restriction on essential office building. I hope that the Order will not be implemented too severely.
One thing about which I am not clear is whether there is disagreement between the Ministers on the restriction of office building, because in his letter, to which I have referred, to the Town Clerk in July, the Minister of Housing did not seem to agree that there should be any restriction on office building. The local authority wished at that time to have power to restrict office building. In his reply, the Minister said that he was not convinced that drastic action was necessary. He also pointed out that it would not help very much in the shortage of building materials, because he said that this was

only a short-term problem. We should like to know how long the Government consider that this restriction should remain and whether there is any danger of its extension to industrial building. This could severely restrict the prosperity of the Midlands.
My final point is to stress what my hon. Friend has said about the authority of a regional council. We are all nervous at this heavy hand of planning over and above the elected local authority. This body is not elected but is appointed and, apparently, it could override, without consultation, certainly without adequate consultation, as is proved in this case, the elected local authority, whose purpose is specifically to look after the interests of the city.
There has recently, perhaps, been an excess of demand for office building in the City of Birmingham, but I am not convinced that the restriction imposed by the Order should extend to some of the outlying areas, where there is certainly a shortage of offices. The restriction could well drive some of those office seekers into the centre of Birmingham, where office accommodation exists, and so aggravate the density and traffic problems in the city. There is a great shortage of office accommodation around almost the whole of the periphery.
I hope that the Minister will be able to assure us that the regional council will not have such heavy-handed powers as to kill the initiative and the tremendous prosperity which we have had in the Midlands, and for which the nation is looking. If this afternoon's debate means anything, it should teach us to be careful how we use restriction and planning by these regional bodies.

10.33 p.m.

Mr. Victor Yates: The hon. Member for Birmingham, Selly Oak (Mr. Gurden) has referred to what he calls inadequate consultation in this matter, and the hon. Member for Reading (Mr. Peter Emery) has also referred to this. I do not know what they mean. The local authority in Birmingham has been making this demand for a long time. It is true that the Minister resisted the demand in July, after both the Birmingham authority and the region pressed this matter upon the Government,


but the pressure that has been brought to bear through the local authority has, I think, convinced the Minister of the necessity for the Order.
It is ridiculous to say that there has not been adequate consultation when there has been so much consultation to stress the demand made by Birmingham.

Mr. Peter Emery: In the Schedule there are listed 23 local authorities outside Birmingham—Birmingham was one of 24—and I believe that the evidence is that some of them were not consulted, and, indeed, were not taking the same attitude as Birmingham was on this. It is that point which needs strongly to be made.

Mr. Yates: I cannot speak for authorities which have not been consulted, but I know the grave housing shortage in Birmingham. It has brought from Birmingham a demand in no uncertain manner, and I do not think one could say that every region has acted in an autocratic manner, after the demands which have been made.
The hon. Member for Reading said that this would not add to the number of houses being built. The hon. Member for Selly Oak said something similar. While one could not say that we should get more houses within 24 hours of the passing of this Order, the fact remains that if it goes through it must release certain building materials for houses, and building materials have been in such short supply in the past year.
Perhaps I may mention one or two examples. Delivery of plaster board, which is so vital, is between 12 and 18 months. It may be possible to obtain smaller quantities more quickly, but for the larger quantities the delay is such that one housing project was held up for weeks, without any work being done on it at all. That was a result of the shortage of plaster board. We all know about the shortage of cement, and also of other materials.
I believe the feeling is widespread, but certainly the people of Birmingham feel that it is absolutely wrong, in the present plight of our housing problem, to see going up buildings which the people think are unnecessary. Of course I want to see industrial building; of course I want to

see factories continuing to be built; of course I want to see the export trade increasing; but we have been arguing for a long time that to build new towns on the periphery of Birmingham means building for the workers houses to live in as well as places to work in. Both sorts' of buildings are important.
The housing situation is of such a nature that the Birmingham authority is now making a tremendous effort and is stepping up the removal of slums and the provision of more houses. I think that this Order is absolutely vitally necessary to Birmingham because of the demand for housing. It may not in the immediate future build more houses, but I hope that the hon. Member for Selly Oak will not say the Order should not be kept on for a reasonable time, to release building materials, so that it can have the desired effect.
I represent one of the largest areas of Birmingham, where redevelopment has taken place, and it has been a source of great satisfaction to me to see the tremendous development which has taken place. In the past 10 years the numbers in my constituency have dropped from 47,000 to 29,000 at the last election. The smallest constituency in the country is evidence of the redevelopment which has been taking place.
Many people in my constituency and in that of my hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) are living in intolerable conditions. Many of the houses are unfit for human habitation. In those circumstances the Birmingham authority is right to demand that luxury buildings and buildings which are not vitally necessary should not be erected.
I applaud and congratulate the Government on their decision. I, too, have received a copy of the letter to which the hon. Member for Selly Oak drew attention. The Minister's refusal caused considerable dismay in the Birmingham City Council, and amongst people generally, but the authority is now happy that the Government are contributing to a solution of this grave problem. I repeat my congratulations to the Government on having brought in this Order, and I hope that it will be kept in operation for long enough to produce some tangible results.

10.41 p.m.

Mr. Graham Page: This is the first Order under the Control of Office and Industrial Development Act, 1965, and this is the first opportunity that we have to see how the Government intend to bring these Orders into operation. The House will know that in Committee we discussed at considerable length the type of Parliamentary control that there should be over an Order of this kind, whether it should be the system of the Order lying on the Table for 40 days awaiting a negative Resolution if any Members saw fit, whether it should be brought before the House as a draft Order requiring an affirmative Resolution, or whether it should be an Order which comes into operation immediately it is made and then needs an affirmative Resolution to give it life for more than 28 days. It was the last form that was adopted in the Act.
These Orders require affirmative Resolution within 28 sitting days, and this is the point on which I want to dwell for a moment. It is unfortunate perhaps that an Order of this nature does not come on to the weekly Statutory Instruments list, and it is not evident to Members the period for which it lasts and the period within which the affirmative Resolution has to be proposed to the House.

Mr. Deputy Speaker (Sir Samuel Storey): Order. The hon. Member has got off the subject of the Order. All that is in order in this debate is the application of the Order to Birmingham, and also the date on which the restrictive provisions apply.

Mr. Page: Mr. Deputy Speaker, I think I am in order in referring to the dates at the head of this Statutory Instrument. I shall try to direct my remarks to the Statutory Instrument before us, but at the head of the Order it says that it was made on 9th August, that it was laid before Parliament on 13th August, and that it came into operation on 14th August.
Perhaps I might give an example of the effect of this. If someone in Birmingham had applied for planning permission before this Order was made and received planning permission in August, after the date on which the Order came into operation, and if he received the result

of his planning application after the Order comes into effect, he may have his application refused, or granted subject to conditions. He may then wonder whether or not to appeal from the planning refusal or from the conditions attached to the planning permission.
It would be relevant, in considering that appeal, to know whether this Order will last beyond the 28 sitting days—in short, whether the Minister will get his affirmative Resolution. No one can assume that that will be passed by the House, not even the Minister. There are certain periods during which the person who has suffered a planning refusal or has received a planning permission subject to conditions can appeal. If he wishes to appeal against that to the High Court on a point of law, he would have to appeal within 28 days. If he wished to appeal to the Minister, he would have a period of not less than 28 days, normally set at about six weeks.
But both those periods have already expired. If he decided, as might be reasonable, to say, "I will wait to see whether this Order is effective before I proceed with the appeal", he would find that his time for appeal had passed before there was any certainty that the Order would be effective.
All this comes about because the Order was made at the beginning of the Recess and an affirmative Resolution is not required until the expiration of 28 sitting days. The Minister of State has brought it before the House at a fairly early stage, but great care should be taken in these matters when the Recess intervenes. The problem could have been solved by the Government's ensuring that the Act got its Royal Assent before the House rose—

Mr. Darling: That was the fault of the Opposition.

Mr. Page: No, the Government tried to rush through too much legislation at that time, and did not concede to the Opposition when they could have got the Bill through quite easily with a few concessions. As a result, the Order could not be made before the House rose.
This means that, for anyone who had a planning refusal or a planning permission with conditions in August, these periods of appeal have run out before


the Order is known to be effective. It could have been foreseen that this would happen on a 28-day Order. The Bill should have had Royal Assent not at the last moment but much earlier than it did, and the Order should have been made before the House rose. There would then have been certainty as to whether or not it was law, which would have avoided this uncertainty which has lasted for three months and not just 28 days.

10.44 p.m.

Mr. Reginald Eyre: The hon. Member for Reading (Mr. Peter Emery) described the area affected by the Order as being very widely drawn. The definition of development affected by the Order is also very widely drawn. It includes not only new office premises, but alteration of buildings and conversion of premises into offices and, perhaps even more surprising, a mere change of use, whereby an existing building, without having anything done to it, is used for office purposes. These two kinds of change of user would have very little recognisable effect upon the demands made on the building industry in this area and would not have a detrimental effect on the desperate housing problem.

Mr. Julius Silverman: Surely if there is a change of use in houses and they are converted into offices or industrial accommodation, that has an effect upon the housing situation.

Mr. Eyre: The hon. Member assumes that the change of user would be from housing, but that is by no means necessarily so. It is within the discretion of the planning authority, but in many cases in Birmingham and elsewhere there is a change of user when we have unused warehouse premises or shop premises becoming recognisably more valuable if used as offices, and accordingly a change of user takes place. I know of an instance in which warehouse premises became unwanted and there was a change of user as a result of which they became usable for office purposes, with no demand at all on the building industry and no loss of housing, and no holding back of the efforts to meet the desperate need for housing which we know exists in part of the City of Birmingham.
In this respect the purpose of the Order is not to deal with the building problem. It must be to put teeth into the Regional Economic Planning Council. Having regard to the complicated and varied region which is affected by the Order, one must ask whether the Regional Economic Council knows precisely what it is doing throughout the area and in all the varied circumstances—because they vary widely over the area. Even in the outer suburbs of Birmingham, the need for office accommodation is quite different on occasion from that prevailing in the centre. The refusal of an application for development could on occasion cause transport problems and other difficulties which have been mentioned by my hon. Friend the Member for Birmingham, Selly Oak (Mr. Gurden).
I am concerned not only with the Birmingham problem. One should look at this great area of the older towns to the west and to the north of Birmingham where there is an urgent need for redevelopment and modernisation of large areas, including business premises. One must recognise that there may well be an indefinite postponement of many of these plans as a consequence of licensing restrictions. There we must bear in mind the effect of the Offices, Shops and Railway Premises Act and the intention to improve office conditions within this region where there are great decayed areas and sometimes very bad office conditions, amounting to slum office conditions.
One must also bear in mind the legitimate and desirable growth of the need for offices in this region. There are small manufacturers operating very successfully in exports, and there is a need for servicing facilities and office accommodation to grow to accommodate this expansion. In addition, there are professional offices in the area. There are accountants, solicitors, valuers and banking premises, and because of the increased prosperity in recent years there has been a growth of demand for their services. The complications of the Finance Act also create an increased demand for these services.
Moreover, there are overcrowded and dilapidated old premises, often occupied by these professional firms, and there is a need for replacement and improvement of conditions. I hope that this will be borne in mind, because it is important that there should be economic balance


within the region as well as economic balance throughout the country. These services are essential to the continuance of a balanced life throughout this important and prosperous region. Where there is an insufficiency of offices, shops and warehouses are often converted into offices and these premises sometimes exceed the area within the limitation of the Order. Sometimes they are subdivided and used by small firms and organisations and it should be emphasised that almost always there is no other regional alternative and that these activities must go on within the area defined by the Order.
I hope that the Minister will give an assurance that there will be no new extra unnecessary degree of bureaucracy and lack of understanding in the indiscriminate application of the restriction contained in the Order which would hold back the necessary improvement of office conditions for professions and other services in the Birmingham area and throughout the region.

10.56 p.m.

Mr. Geoffrey Lloyd: As one would expect of him, the Minister put forward a studious justification of the Order. It is common ground in Birmingham that there is an excess of office accommodation at present. One might ask, therefore, is there anything further to say? The answer is that there is.
We have had, even in the House tonight, an extraordinary example of confusion. We have really been discussing two orders; one real and one imaginary in the mind of the hon. Member for Birmingham, Ladywood (Mr. Victor Yates). From Birmingham's point of view, the origin of the Order is extremely unsatisfactory. It first came up as a demand from the Labour-controlled council in May, just before the municipal elections, that office building should be stopped so that there could be more housing, a quite plain barefaced political stunt to hide their appalling housing record of the past few years.

Mr. Ioan L. Evans: Is it not a fact that in the City of Birmingham there are about 40,000 people on the housing list while in the city centre and elsewhere there has, for a number of years, been a large amount of vacant office accommodation?

Mr. Lloyd: I need not deal with that argument. The Minister of Housing himself—I must give him credit for this—effectively rebutted the argument coming from the Labour council and said that there was no substance in the idea that there was great competition for materials between office and house building.
I am clearing that point out of the way because we should get down to the real point made by the Minister tonight. He argued the matter on a completely different basis. If we get the other point cleared out of the way—the effort to put out a smokescreen against the fact that they built only half as many houses as the Conservatives built when they were in office—we can get to the argument the Minister adduced for the Order, which, apart from the spurious idea that it might be helpful to the people of Birmingham, shows that the people there have some cause to be anxious about the Order.
What is the reason? It is that the Minister has argued the matter on the long-term basis of the desire to help other regions of the country in employment and—he does not hesitate to say so—I think, potentially at the expense of Birmingham and the area of the West Midlands. [An hon. Member: "Why not?"] I hear an hon. Gentleman opposite asking "Why not?" That intervention must be heard in the City of Birmingham because, while I quite understand that there are people who would take that point of view, even the hon. Gentleman who made the intervention will, I hope, understand that the people of Birmingham, employers and employed, have built up between them this tremendous prosperity to which my hon. Friend the Member for Birmingham, Selly Oak (Mr. Gurden) referred and to which the Minister was continually referring as one of the reasons why he felt that the Order could be forced on the area. It was because it was doing extremely well.
This Order is a kind of penalty on the success of the West Midlands and Birmingham, imposed admittedly by the Government in order, as they believe, to help somewhere else. There is a growing anxiety in Birmingham that the Government may have carried too far this process of siphoning off the prosperity of the Midlands to other areas. I can give examples which are germane to this Order. In Birmingham on Monday


I heard of firms, which provide employment similar to that affected by this Order, being forced to leave the city. These firms, to a considerable extent, are firms which are independent of cyclical fluctuations of trade.
The manufacturers of Bird's Custard, a food product, who have been in the city for a great many years, were quoted as an example. The motor industry, on the other hand, is a cyclical industry and whilst Birmingham is very prosperous, it and the Midlands, to the extent of dependence on the motor industry, are living dangerously in their prosperity. Therefore, it hurts these areas the more when industrial and commercial employment of a non-cyclical kind leave the area. Such a movement can prove a great future potential loss to the city and surrounding area.
I should like to reinforce what has been said by my hon. Friends about office accommodation. Circumstances governing office accommodation in the surrounding areas are not necessarily the same as those in the city centre. In Sutton Coldfield, for example, there is a shortage of offices. I have received a letter from an architect who says that there is a great deal of concern at the way in which building societies are competing for every shop in the Parade—one of the central areas—for office purposes, thus putting the retail trade under great pressure. He says that there is a considerable shortage of offices in the town. I have made inquiries and have found that the local authority is opposed to this Order in Sutton Coldfield and I cannot find any record of consultations with the authority.
I was struck by the way in which the Minister of State referred to the fact that in July when the Chancellor of the Exchequer came to the point where he had to amass a quiverful of new measures to present to the world of international finance from which he had to get the money, it was found timely to include the provisions made in this Order. Having had some experience of Whitehall and the Treasury I can understand how a request went round to the Board of Trade and it was said, "These measures are useful. We will shove them in." But in the Midlands we do not appreciate having provisions of this kind, which we do not

like in their long-term aspects, brought forward just because the Chancellor of the Exchequer has to make some further gestures to international finance.
This is a serious matter from the point of view of the Midlands. Everybody knows that there is a surplus of good office accommodation in Birmingham. In fact, this Order comes after the time when it would have done any good. So, on the short-term basis, it will do no good at all, and on the long-term basis there is much anxiety in the Midlands about this whole subject.

11.5 p.m.

Mr. Julius Silverman: A good deal of what the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd) said is quite irrelevant to the point we are discussing. The prosperity of Birmingham, which is now at a higher point than ever before, will not be affected in the least by the Order. We are not here dealing with industry or with jobs; we are dealing with the building of white elephants, for that is what a lot of these offices are. To illustrate the point, I think I am right in saying that the number of void offices in Birmingham already is such that the City Council is losing no less than £800,000 a year. That is void office property already built, and more white elephants are being built today.
One may say, if that is so, why do not businessmen see that these office properties are likely to be white elephants and stop building them? The outlook of these people is such that, in the expectation of profit in the future, they will go on building these properties, which remain void and which, as has to a large extent been conceded, are unnecessary. If they are unnecessary, why object to the Order as it affects Birmingham?
This is a matter, first and foremost, of priorities. When we talk of the building industry, it is a question not only of building materials but, as my hon. Friend the Member for Ladywood (Mr. Victor Yates) pointed out, of building labour, which is over-extended throughout the whole region. In blunt terms, if we have more offices, we shall have fewer houses. It is as simple as that. There was probably a time, 10 years ago, when this might not have been so. It was a different sort of labour used for


the erection of ordinary cottage properties and houses. Now, however, the labour used for the construction of high blocks of flats is very much the same as that used for office building. It is, as I say, a simple question of priorities. If we do one, we do not do the other.
A good deal has been made by hon. Members opposite of the "phoney" point of Tory propaganda, which we have heard for a long time, about the number of houses built by the Tories in Birmingham in the early 1950s. True, they built more than have been built in the last few years. But why?—because that was when the licensing system, part of which is being revived now, was still in operation. The system of priorities still existed and had not yet been dismantled by the Tory Government. It had nothing to do with the efficiency of the Tory council. The reason was legislation introduced by the Labour Government which still remained at that time and made it possible for more houses to be built in the Birmingham area.
The Order before us now will, so far as it is effective, result in the building of more houses, which are badly needed by the people of Birmingham. Already, the Birmingham City Council, with consideable confidence, has been able to increase its house building programme for the future to a level higher than ever before. The prospect of this Measure has been one of the reasons. The council expects to be able to put out contracts which it has not been able to put out before and think in terms of, at least, coming to grips with the housing problem. This, together with the land which has been made available by a Labour Minister of Housing and Local Government, will enable Birmingham to get on with its housing programme. Therefore, I welcome this measure of priorities. I am only sorry that it was not introduced earlier, but I am quite sure that all Labour Members representing Birmingham constituencies congratulate the Minister on introducing it, and wish him well. We hope that it is going to be effective.

11.10 p.m.

Mr. Darling: In reply to what has been a most interesting and useful debate, may I say first of all that I have no objection whatever to giving credit to hon.

Members opposite for persuading us in Committee that such Orders as the one under discussion tonight should be brought before the House under the affirmative Resolution procedure. Hon. Members will recollect that they were pushing at a rather open door, but I will not labour that point. We will give them all the credit they want for it.
The first point raised by the hon. Member for Reading (Mr. Peter Emery) was that this is a very large area. Obviously he has been doing some homework, during the short periods he spends in the country between the visits which he makes on his Council of Europe duties. He has discovered that the acreage concerned is about 166,000. I cannot imagine what 166,000 acres look like, but I agree that it is a pretty big area.

Mr. Peter Emery: If the hon. Gentleman divides by 640, he will get it in square miles.

Mr. Darling: The area involved, as I am sure the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd) will know, is the Birmingham conurbation as described in the West Midlands Study. If the hon. Member for Reading cares to look at the West Midlands Study again, he will see that to get the local authority areas in line, as far as we can, with the Birmingham conurbation as described in the Study, we have to go beyond the conurbation itself. In other words, particularly to the north and west and, in the case of Sutton Coldfield, the southeast, the urban area tends to fade off to what might be called semi-rural areas inside the local government boundaries. It is quite obvious that, when laying down an Order like the present one, the local authority areas cannot be divided up. The job would be impossible.
If I am not out of order in mentioning it, I have some experience of this in the City of Sheffield at the moment, where we are considering redrawing ward boundaries. In the descriptive matter, one has to say that the line should go alongside the railway for a quarter of a mile, then turn off to the right alongside the canal, and so on. To lay down that sort of boundary description in an Order like the present one would be quite impossible. One must work to local authority areas. Therefore, some of the areas are not totally urban. They have some of what,


even in the West Midlands, would be called the green belt area inside them. However, that makes very little difference, and no practical difficulty at all in the administration of the Order.
The hon. Member then went on to ask what will be the position if the Boundary Commission's proposals for redrawing the boundaries of, I suppose, most of the local authority areas in the conurbation are accepted and come into operation on 1st April. The answer is that a fresh Order will be required for the purposes of office control so that the designation of areas in the Order comes into line with the new local authority boundaries; and I gather that some of the local authorities will be renamed. But the total area that will be subject to the office control will remain roughly the same.
The hon. Member said that the control does not mean that more houses will be built. That point has been well answered by my hon. Friends for Birmingham, Ladywood (Mr. Victor Yates) and Birmingham, Aston (Mr. Julius Silverman). It will relieve some of the pressure for housing by stopping the increase of employment in the centre of Birmingham, and resources will become available for housing if office building does not continue. To what extent this will happen is a matter for conjecture at present. We expect that it will help. But that is not the only reason for the Order.
The hon. Member for Reading wanted me to make clear the position with regard to retrospection. Part I of the Act will apply to planning applications made in the Birmingham conurbation on or after 14th August. There will be no retrospection beyond 14th August. That is perfectly clear. The Order begins on 14th August, and there is no retrospection.
I was asked whether we would take into consideration the modernisation of offices because this is really necessary in many cases. I thoroughly agree. Modernisation, particularly in offices associated with industrial establishments, means a rearrangement of offices more or less within the same premises and does not necessarily lead to any extension of employment. In fact, if modernisation is done properly firms ought to be able to employ fewer workers at the end.

Mr. Geoffrey Lloyd: I do not think that is true for the export trade, particularly in the motor car industry, when one is working all the time for a more sophisticated form of salesmanship. Staff in offices attached to large factories in Birmingham are writing all the time in foreign languages to the countries which are receiving the goods. One needs a net increase in such office staff in order to achieve better salesmanship abroad.

Mr. Darling: That is only one side of modernisation. The point made by the right hon. Gentleman is a very good one, and we take it, but generally speaking modernisation means putting in more mechanical equipment to help office workers. Where no increase in office employment is called for, which is what we are concerned with here, I question very much whether the office development permit procedure will hold up any modernisation schemes.
I was also asked about cases of hardship. From our experience of the control in the Metropolitan region I do not think there will be many cases of hardship because there will be no retrospection. It is out of the retrospective character of the control as it applies to London that hardship cases arise. Certainly the promise and undertaking that we gave in regard to the Metropolitan region will apply here.
I was asked how many applications have so far been received. The number is 24. These are being examined on their merits in the light of the criteria which I mentioned, and replies will be given to the applicants as quickly as possible. From our experience of the London control, I do not think there will be complaints about the time that will be taken.
We were also asked why there was no consultation with local authorities. If hon. Members will look at the statement made by the Chancellor in July, I think they will agree that he proved that in this year's difficult economic circumstances speedy action of this kind was called for. I was surprised to hear from the right hon. Gentleman that his local authority had protested. The Board of Trade has so far had only one communication from a local authority questioning the need for the Order.
The right hon. Gentleman expressed the hope that Birmingham will remain


a centre for industrial progress and prosperity and a great exporting centre. I thoroughly agree with him. We can assure him that Birmingham will do a great deal better in the future if we can take some of the heat out of the present demand for labour. I can assure the right hon. Gentleman and the hon. Member for Birmingham, Selly Oak (Mr. Gurden) that if they will consult some of the industrialists in the Birmingham conurbation, who are complaining all the time about firms which are going to poach their workers being allowed to continue expanding, they will appreciate that the Government are not alone in seeking some control over developments there.
The hon. Member for Selly Oak asked about sites already cleared where, if this control operates as quickly as we would like, there may be no new office development. My hon. Friends have answered that. I am sure that these are admirable sites for housing development, which Birmingham so greatly needs.
The hon. Gentleman went on to say that one of the biggest demands for offices—I do not know what arithmetical proportion—is made by Government Departments. That is fine—if the Government Departments are going into existing vacant offices and are not building new offices. We would like to see this happening all over the city until all the vacant offices are filled; and then we will see whether there is need for further building. But we shall not allow any further Government office building in the Birmingham area meanwhile.

Mr. Gurden: I appreciate what the hon. Gentleman says, but my comment was in relation to the point he made about the extra number of office workers going into the centre of the city.

Mr. Darling: We will try to keep it to the minimum. I do not know of any Government proposals of this kind but we will look into it.
The hon. Gentleman also asked how long the restriction will remain. The Act is to last for seven years. We will see whether Birmingham needs this control throughout the whole period. We will certainly look into the point that there may be a genuine shortage of offices on the perimeter. If that could be satis-

fied, it would avoid the need for people to travel into the centre.
Several hon. Members opposite referred to the position of the West Midlands Economic Planning Council as if it were responsible for this. The Council has no powers. It is only an advisory body. Last June the Council recommended that my right hon. Friend should consider making an order designating the Birmingham conurbation for purposes of office control as soon as the Bill became law.
The hon. Member for Crosby (Mr. Graham Page) wanted to know whether projects for which applications for planning permission had been made before 14th August would require an office development permit. As far as I can see, they would not if application had been made in the terms of this Order. I do not know how far the hypothetical case he mentioned would happen in view of the fact that planning permission would not require an o.d.p. if application were made before the 14th, and I do not know how many cases there have been where an application has been turned down and an appeal lodged. It is a hypothetical case, but we will look closely at the point where planning consent was refused.
I cannot take it further than that now. As I had to explain so frequently in Committee during consideration of the Measure, I am not a lawyer and I require legal advice on this point, as on so many others.
The hon. Member for Birmingham, Hall Green (Mr. Eyre) said, rightly, that the Order goes wider than control over new buildings and deals with change of use. All this is in the Act and was fully discussed by competent hon. Gentlemen during the Committee stage, who gave me a slightly rough time on occasion. Change of use does not mean any release of labour or materials. A change of use to offices—for example, changing a warehouse to office use—increases office employment. That is the point we have to keep on making. In the operation of this control we are concerned with the distribution of employment, and therefore we must look closely at any change of use which will increase office employment.
The hon. Member for Hall Green also mentioned the need for the modernisation of offices to the north and west. We


will bear in mind what he said when we are considering office development permits.
He also raised the issue of professional services which must remain local—and this answers the question of the hon. Member for Reading about the criteria. This is probably badly phrased, but the public interest means the public interest involved when the services have to be local, have to be public and associated with the locality. Obviously, the town hall cannot be moved out of the local authority area which it serves and the lawyers, the bankers, the doctors and so on have to be located in the areas in which they work.
The right hon. Member for Sutton Coldfield questioned the origin of the Order. It certainly did not start with the Labour-controlled City Council of Birmingham, as suggested in the party political point which the right hon. Gentleman tried to make. If I remember rightly—and my hon. Friend the Member for Aston referred to this—the Birmingham City Council asked for a stop to office building long before the May elections and did so on quite genuine grounds, although nothing to do with this Order. The Council said that until the empty offices, the speculative offices, the white elephants, as my hon. Friend the Member for Aston called them, were filled, there should be no more office building in the centre of Birmingham.
The very good reason was that those empty offices did not pay rates, and the Council reckoned that it was losing the equivalent of a 4d. rate because of that. That was a very good argument to put forward for office control, but it is not the argument with which we are dealing in this Order. I commend the Birmingham City Council. I think that it is doing a wonderful job of work, and I think that its arguments are sound. However, the origin of the Order is the statement by the Chancellor of the Exchequer in July to deal with the appalling economic problems which the previous Government left to us.

Mr. Peter Emery: We will not go into that at this late hour. When the hon.

Gentleman talks about vacant office premises, would he bear in mind that both in opposition and in Government he is pledged to carrying through the Offices and Shops Act to deal with overcrowding and so on and that unless we have the buildings it will be impossible to comply with the terms of that Act by 1967?

Mr. Darling: I do not accept the time limit which the hon. Gentleman has given. But, obviously, the best way in which to deal with inadequate and decaying offices which do not come up to the standards of the Act is to move people into the empty modern offices which are there for the purpose, and the quicker that is done the better.
The right hon. Member for Sutton Coldfield said that there was anxiety in the Midlands that our policy of stopping, or checking, or controlling industrial and office development in the Midlands would go too far. I can assure the right hon. Gentleman that no one need have any fear that what we are doing will lead to under-employment in the Midlands. The true story about Alfred Bird is that because of congestion the firm moved out to Banbury of its own volition. We would much have preferred it to go to a development district. There is no need for anxiety. We shall not create under-employment in this thriving, throbbing area.
We intend to retain the great diversity of trades in the region so that prosperity and full employment will continue. What we must have, however, in the interest of the whole country, is a far better balanced economy than we have now. It is no use our talking about overexpansion in the Midlands, or allowing expansion to continue at the rate it has done, as long as we have unemployed workers in any part of the country.

Question put and agreed to.

Resolved,
That the Control of Office Development (Designation of Areas) Order, 1965 (S.I., 1965, No. 1564), dated 9th August, 1965, a copy of which was laid before this House on 13th August, be approved.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. McCann.]

11.31 p.m.

CADCO

Mr. William Hamilton: This is in the nature of a further instalment in the serial story which began in an Adjournment debate on 1st December last year. At that time, I had in my possession a letter from the Glenrothes Development Corporation from which it might be apposite to quote. That letter used these words:
A spate of further adverse publicity will do the town no good whatsoever.
That was almost a year ago. There is very little evidence, in view of the subsequent development of the town, to suggest that that has happened, despite the continuous adverse publicity that the Cadco affair has had meanwhile.
In any event, I would be failing in my duty as a public servant if I did not seek by every means at my disposal to ascertain the truth in this unfortunate affair, to prevent any recurrence elsewhere and to call to account those responsible for it. All these responsibilities I intend to try to discharge, however long it may take and however distasteful it may be to certain individuals.
The debate on 1st December last year was answered by my hon. Friend the Under-Secretary of State for Scotland. For one reason or another, and not forgetting that I left him only seven minutes in which to reply, he did not answer any of the questions which I put. Neither did he confirm or deny any of the allegations which I then made as to departmental responsibility, guilt or negligence.
In that debate, I accused the Treasury, the Board of Trade, the Scottish Office and the Glenrothes Development Corporation of a grave dereliction of their duties. I accused the former Secretary of State for Scotland, the right hon. Member for Argyll (Mr. Noble), whom I am glad to see in his place, of playing up the project as a glittering and exciting example—these were the words I used—of what Her Majesty's Government at the time were doing for Scotland. I believe that he knew little or nothing of what was going on. If he did know, his offence and culpability become that much greater.
Eleven months have passed since that debate, and I am still waiting—and the public and the Press are still waiting—for the answers to those questions and those allegations, which I will not repeat now.

Following that debate, however, as everyone knows, several inquiries were begun, although denials were made at the time. The Treasury has been inquiring into certain exchange control matters, the Scottish Office has been inquiring into the purely Scottish administrative aspects of the matter and the Board of Trade has been inquiring into the industrial facets of the case. In addition, certain organs of the Press, local and national, have been engaged on their own detective work.
Here I may interpose a few remarks about the Press. At times it can be a great nuisance and embarrassment, but in this case, with a few exceptions—and there have been some—the journalists and their newspapers have served the public interest well.
No one, therefore, can complain about any lack of research and investigation, public and private, into this affair. We now seem to be getting to the end of the road. All the facts have been collected, all the departmental reports have been completed, and all have gone to the Lord Advocate and the Director of Public Prosecutions. I suppose one can reasonably assume from that that criminal proceedings may ensue against a person or persons as yet unnamed. I could probably give one or two names that would not be wide of the mark. To that extent, the case may justifiably be said to be sub judice, and I would wish to say nothing which might prejudice future criminal proceedings, and I therefore ensured that this debate would be answered by the Board of Trade, to whom I should now like to put—and I shall have to put them as briefly as I can—a cannonade of questions which must be answered, if not tonight, then by subsequent correspondence. The public interest demands no less than that. Some of the questions were put or implied last December. None was answered. So I hope my hon. Friend will excuse the repetition.
The first question is, what was the Board of Trade's part in this squalid tale? I had a very surprising Answer from my right hon. Friend the President of the Board of Trade on 28th October, a few days ago, in which he said:
If it is my hon. Friend's suggestion that the failure of Cadco was in any way due to


my Department, then I must emphatically repudiate it."—[OFFICIAL REPORT, 28th October, 1965; Vol. 718, c. 84.]
All right. Let us hear what it was.
The second question is, is it normal procedure for the Board of Trade to show industrialists possible sites in development districts before making thorough inquiries into the financial soundness of those prospective developers? Question 3: did the Board of Trade at any time offer financial assistance to Cadco? Question 4—I had better number them strictly and my hon. Friend in answering can refer to them by their numbers, and that will save him a little time—why was there such a long interval between the receipt and the rejection of Cadco's application for a building grant? I gave the dates, I think, last December. I will not repeat them now. Question 5: why did the Board of Trade or B.O.T.A.C. fail to warn the Glenrothes Development Corporation much earlier about the financial soundness of Cadco? I have an idea the Minister will reply that this is B.O.T.A.C. procedure, that the inquiries it makes into companies are confidential, but I should have thought there might be exceptions where another public corporation and public money are involved. Question 6: why does the Board of Trade not examine firms going to new towns at least as closely as those going to development districts? Question 7: arising from the inspector's investigation, what steps have been taken by the Board of Trade to tighten up procedures for sanctioning development?
Question 8: if the Board of Trade has nothing to hide—and the Minister has implied that in the Answer to the Question to which I have referred—and it can give satisfactory answers about its part in the affair, and if the decision to publish the report of the inspectors lies with the Board of Trade, why is it being held back? What has the Board of Trade to hide?
Question 9: are the premises which were built for Cadco by the Development Corporation to lie idle until the report is published? Question 10: if not, what are the Board of Trade and the Corporation doing to find new occupants who will use the capital, create jobs, and help to pay off the loss to public funds that might arise in the event of the premises not being occupied at all? Some

time ago I put a Question to my right hon. Friend about the feasibility of using the premises as a public enterprise. Question 11: has this possibility been fully explored? The Labour Party—and now the Labour Government—is committed to creating new public enterprises, particularly in areas like this. This is a wonderful opportunity to put that promise into practice now that we have some assets in the hands of a public enterprise and a public corporation. What consultations has my learned Friend had with the Ministry of Agriculture, Fisheries and Food in England and the Agricultural Department of the Scottish Office about the possibility of using these premises in the public interest and as a public enterprise?
Question 12: How much longer have we to wait before the Lord Advocate and the Director of Public Prosecutions decide whether there are grounds for prosecution? Have we any idea of the time scale involved here? But even assuming a satisfactory answer to that, and even assuming that the prosecutions eventuate—and I hope that they will—of what use will they be compared with the need to allay the great and growing suspicion and the need to learn and apply the lessons which will surely emerge from the publication of the report in full?
That leads me to Question 13: can we have a categorical assurance from my hon. Friend that the report will be published, and in full? The answer should be "Yes, a thousand times yes", because the present Administration have nothing whatever to fear. Indeed, they have everything to gain from the fullest exposure of the shortcomings and laxity of the previous Administration.
My last question is, as the laws of evidence in Scotland are different from those in England, and as it is likely that such criminal offences as might have been committed were probably committed primarily in Scotland, it is probable that the Lord Advocate will take a longer time to reach decisions than will the Director of Public Prosecutions, and presumably everything will await the decision of the Lord Advocate. What steps is my hon. Friend taking to impress on the Lord Advocate the necessity for speed in this matter, and will he, if it is at all possible, try to correlate the decisions made by the Director of Public Prosecutions with those


of the Lord Advocate? Of course, the longer the delay, the uglier become the rumours about this dreadful affair. Before this matter is finalised we may have an ombudsman, and I can think of no better case on which he could begin his career than that of Cadco, in Glenrothes.
Meanwhile, in view of the unsatisfactory answers which I expect, I beg to give notice that I will raise this matter on the Adjournment in the next Session.

11.45 p.m.

The Minister of State, Board of Trade (Mr. George Darling): I have taken note of the last remark of my hon. Friend the Member for Fife, West (Mr. William Hamilton). It is clear from his vigorous speech and the number of questions he has asked that the Ministers who, one might say, are involved in this matter will have no peace from my hon. Friend's persistent campaigning until the report of the Cadco affair is published.
I have no complaint about my hon. Friend's persistence. This is a matter which seriously concerns his constituency, it is a matter of concern to him personally and to everybody engaged in public and commercial affairs. Therefore, I agree with my hon. Friend that if there were any attempt to suppress this report, it would be a most reprehensible action. My hon. Friend is fully justified in demanding its publication.
I wish to assure him that there is no question of this report being suppressed, and there never has been. My right hon. Friend the President of the Board of Trade has asked me to state categorically that the report will be published. My hon. Friend said that he hopes that the report will be published in full. I would point out that the Board of Trade has no authority to publish some parts, to delete other parts, of an investigation report of this kind. If it is to be published, it has to be published in full. But publication must be delayed for a time, as my hon. Friend himself has suggested, until the inquiries by the Lord Advocate and the Director of Public Prosecutions are concluded. I am sure he would agree—he said so—that it would be wrong to publish the report as long as there is any risk that there might be prejudice to the fair trial of any person who might be charged in connection with matters dealt with in the report.
This is a difficult matter for Ministers to decide on. The balance must be fairly held between early publication of matters of public interest and concern, on the one hand, and the liberty of the subject on the other. However, I repeat that there is no question of suppression of any information. The report will be published in full when my right hon. Friend is satisfied that it properly can be.
My hon. Friend asked whether these legal inquiries can be speeded up. As he knows, the matter is in the hands of the Lord Advocate at the moment and my hon. Friend the Under-Secretary of State for Scotland, who is here, will have taken note of my hon. Friend's remarks.
I will try to answer my hon. Friend's questions as best I can. I hope that I can get them in the right order. First, he asked why the Board of Trade show representatives of a company which is seeking industrial sites in development districts possible sites for the erection of factories without first making inquiries about its financial circumstances. It would be difficult if my hon. Friend insisted that the financial standing of all the companies to whom we show development district sites should be examined beforehand.
During the last 12 months, officials of the Board of Trade discussed the possibility of movement to development districts with about 3,000 firms and supplied information about sites and financial assistance available in those districts to a similar number of other firms—that is, a total of 6,000. If the Board of Trade investigated the financial standing of all the firms with which it deals in these steering activities, the speed with which it could deal with inquiries would be very seriously reduced, and indeed the whole steering machinery might well be brought to a halt.
Moreover, the vast majority of firms with which the Board of Trade deals in this field are financially sound. This is obvious. One knows the firms, one knows what kind of business they are doing and how long they have been doing business. They would be very much less willing to seek the help of the Board of Trade if they knew that before they could get that help they would be subjected to a financial examination. After all, one does not expect to prove one's credit rating


before being told what a sales organisation has to offer.
Therefore, Cadco was treated in exactly the same way as all other companies are treated in this steering operation. The fact that a firm is introduced, for example, to a New Town Development Corporation by a Board of Trade official who may be escorting the firm's representative on a tour of possible sites does not constitute, and is never represented as, a guarantee of the financial standing of the company.
My hon. Friend went on to ask about the long interval—I think that he put it like this—between the receipt and the rejection of the company's application for a building grant. Again, this is Board of Trade procedure, and the more that one considers it the more the procedure needs to be commended rather than criticised. I know that when I first became involved with these applications for financial assistance to firms going to development districts, I queried the length of time which the Board of Trade Advisory Committee took to examine the firms concerned.
When one goes into the time factor quite a number of issues arise which one had not thought of. This happened in the case of Cadco. The first step in dealing with a building grant application—which is the first application made for financial help—is to establish prima facie the eligibility for further consideration under the terms of the Act. In the case of Cadco the application was received in September, 1963, and it satisfied these first tests. Then it was referred to the Board of Trade Advisory Committee in November, 1963.
The next step, as I think my hon. Friend knows, is to consult the Board of Trade Advisory Committee, as we are required to do by the Act before making a building grant, and the Committee's job is to advise the Board of Trade whether the grant should be made because there are good prospects of the undertaking ultimately being able to be carried on successfully without further assistance. All these examinations take time. Among the things which the Board of Trade Advisory Committee requires is the latest balance sheet and the most up-to-date accounts and these became available, I think, in January, 1964. Then the Board of Trade Advisory Committee

quickly got to work. Supplementary information was required. This did not come along until June, 1964. The application was considered during July and rejected at the end of the month. The point which I am making is that time is needed for these very careful examinations before any public money is allowed to go to the firms which are making application for it.
I wanted to make that clear, because it is one of the key points in the series of questions which my hon. Friend has given me.
My hon. Friend asked why the Board of Trade does not look at firms going the new towns nearly as closely as it examines firms going to development districts. In fact, the Board of Trade does not make inquiries about the financial standing and prospects of companies going to development districts unless such firms seek financial assistance from the Board under the Local Employment Acts. All applications for such assistance are examined in exactly the same way.
I do not think that I need go over the whole story of why the Board of Trade did not warn the Glenrothes Corporation much earlier. I am sure that this point will be brought out in the report. The real issue here is the question posed by my hon. Friend; whether we will take note of any recommendations which come out of the inquiry, as a result of any criticism or whatever it might be?
As my hon. Friend knows, the Scottish Office has told me that steps have been taken to prevent a recurrence of the Cadco situation and that instructions have been given to the Scottish New Town Development Corporations laying down the procedure for assessing future industrial and other projects and providing them with a check list for use in assessing especially difficult cases. They have also been instructed to seek expert advice, including the advice of consultants when necessary.
If time permits, there are three further questions I will answer. First, what action is the Board of Trade taking to find other occupants for the premises? I understand that, in consultation with the Board of Trade, the Development Corporation office in Scotland is making the availability of these premises known to possible


occupants. I understand that firms have already agreed to take over nearly all the premises which are likely to be of interest to industrial users.
Secondly, the question of the piggeries. I have taken note of what my hon. Friend said about consultations with the Ministry of Agriculture, Fisheries and Food. Indeed, consultations have taken place about their use as piggeries. I do not know what one could do with a piggery except keep pigs in it. This matter is still being considered, but I am afraid that we have had no success so far. We may have success in the future. We will continue our consideration and see if something can be done.
Thirdly, my hon. Friend referred to the laws of evidence being different in Scotland from those in England. I

imagine that that is so, but I have once before tonight had to point out that I am not a lawyer and that I sometimes get tangled up when considering legal matters. Whether or not this is a matter which should go to an ombudsman, I do not know. I have noted my hon. Friend's remarks about speeding up the work of the Lord Advocate, but he will agree that this legal investigation must be done thoroughly. However, his point has also been noted by my hon. Friend the Under-Secretary of State for Scotland.
I hope that I have answered most of my hon. Friend's questions. I assure him that if I have not I will answer the remainder by writing to him.

Question put and agreed to.

Adjourned accordingly at one minute to Twelve o'clock.